Contracting in Germany

[Close2Bankrupt]

Mythbusters

This seems to be a myth, that all UK based agents tell contractors, "The only way to work Germany for a UK Agency is to work through a management company". So what is the agent getting out of this referal (commision?)

If someone can prove me wrong, by actually pointing me at an active legal decission that states this, then I will give up on this point.

Just like Tim, I am aware of many UK contractors working in Germany, through UK Agencies, without the need to have a management company in between.

[AlfredJPruffock]

Far too aruldite for round here, shirley?

Shelly shum mishtake ?

[Close2Bankrupt]

Interesting paralell thread on the same issue

http://forums.contractoruk.com/accou...an-cometh.html

[sapcoder]

tim123 wrote


Why would a UK law be effective for a contract in a foreign country?

I know several people freelancing in Germany, though UK based agencies

Sorry tim123 I should make this clearer. I was making the point that close2taxman is fudging the facts when he says he is contracting in Germany without an interim company. This is of course possible but it is not possible if you are contracting through a UK registered agency. Any contract signed with a UK Agency requires that you are supplied by a company to the Agency otherwise you must become an employee of the UK Agent. You are absolutely correct in saying ‘I know of several people freelancing in Germany “through” UK based Agencies. I too was contracting in Germany where a UK Agency had found the work but I was supplied by a company to the Agency so I did not have to be employed by the Agent. The law is a UK based law affecting UK agents whether their client is based in Germany or otherwise. My accountant had written to me in the past quoting ‘Section 44 ITEPA 2003.

A UK Agent in practice has two choices.

1. Employ you directly, you then become an Employee

2. Engage your services via a company

[tim123]

tim123 wrote


1. Employ you directly, you then become an Employee

2. Engage your services via a company

I snipped the first bit because I didn't understand it, but as to the above two choices I will repeat.

I know of several people freelanceing in Germany though UK agencies.

No one else is in the chain.

The client pays the agency, who pays the contractor gross, who personally declares their earning to the finanzeamt as a freelancer.

tim

[LilDarling]

Close2noknowledge poses the question

"The only way to work [sic] Germany for a UK Agency is to work through a management company". So what is the agent getting out of this referal [sic] (commision [sic] ?)

The answer LEGALITY

A UK Agency cannot by law engage you directly as a Freelancer

They do not want to engage you as an Employee (Too many Employment Laws to navigate)

Close2lost you ask for someone to point to an ‘active legal decission [sic] that states this’. See Sapcoder 29th January #48 or try entering the reference he suggested, ‘Section 44 ITEPA 2003’, in www.google.de (Seiten auf Deutsch). Her Majesties Revenue and Customs will inform you.

Close2givingup give up as you promised. By the way – don’t they teach proper English spelling in German schools?

[Close2Bankrupt]

Still not clear!

I did checkout the reference provided by Sapcoder. It is however not clear why this law would apply to a contractor working in Germany, registered in Germany, paying German taxes, working through a UK agency.

Based on the number of English/British contractors working at my current client site, direct through English agencies (without a management company), it makes me wonder how this is possible.

Does this ‘Section 44 ITEPA 2003’ only apply to consultants registered in the UK, and paying UK Tax?

Close2givingup give up as you promised. By the way – don’t they teach proper English spelling in German schools?

As to my schooling/education, the closest I have been to a German school, is the German language school I attended last year. I was born, in the UK, went to school & University in the UK, worked the last 14 years in the UK and lived in the UK until I moved to Germany last year.

As to my sudden increase in knowledge, it is because there is a total lack of knowledge on these matters. As everyone seems to be relying on what the UK agency tells you, what the management company tells you, what the account assigned by the management company tells you. This is the reason why I contacted German Tax specialists for information on how to work in Germany as a freelancer, and have spoken to other British consultants in the same position. Any information I have received, I have posted on this board.

Is my spelling better this time?

[darmstadt]

I did checkout the reference provided by Sapcoder. It is however not clear why this law would apply to a contractor working in Germany, registered in Germany, paying German taxes, working through a UK agency.

I did this some years ago and the UK agency wanted me to go through a management company, upon mentioning this to my accountant, they just laughed and said 'no way unless I want to get investigated!' As I have a residents permit for Germany there is no need for me to do any of this so it doesn't really apply but try telling UK agencies this. I bill to various companies across the EU (and USA) and work in them. As long as I pay my tax here in Germany then I have no problems. The problem is that UK contractors come here and think that they can get away with paying no tax, etc. here by using, what is considered under German tax laws, dodgy schemes that the Finanzamt go after them and gives the rest of us, who do everything legally, a bad name.

[BlasterBates]

If agencies are doing business in Germany, they must register and pay tax there. No ifs and buts. The same applies to German agencies in the UK.

[Northerner]

Masquerader

Is my spelling better this time?

Better but still need to improve your grammar and punctuation. Still not good enough to pass an English GCSE.

I have now worked three contracts here in Germany 1 after another WITHOUT the use of management companies. I am registered as a Freelancer, have a VAT number, and declare all my income in Germany.

3 contracts in 9 months is very unlikely. Unless of course you were too busy hassling contractors about their tax affairs to do your work. If you did a good job you would have got an extension to your contract.

Based on the info I have received from my accountant for my income of 2008 and planned income of 2009, on my 110,000 I am expected to pay approximately 12,000.

Stilll would be interesting to know how you manage to pay a EUR12K tax in Germany on an income of EUR110K. Or how you managed to get away with 50 or 60K worth of business expenses in the 9 months you have been in Germany.
That's at least 6k/month!?! Or do you have a Ferrari as your company car.