. . Germany - the taxman cometh

[BlasterBates]

In Germany, don't most people live in blocks of flats where you have one entrance with a whole bunch of named bells? If they turned up at someone's old address, they'd probably not find that person's name and so that person would not know they'd visited.

Once they pay the visit, does that mean its already too late to do the self-accusation?

Yes once the guy turns up. But I think in this case one would have a strong argument to blame the accountant which would relieve you at least of some blame. If you lodge a grievance, whatever happens that should be taken into account.

[xiao147]

How about the VAT issue? Can that be treated separately?

Are the clients (I mean the company/agency paying the contractor) legally obliged to pay up VAT that was originally zero-rated?

[LegendsWear7]

How about the VAT issue? Can that be treated separately?

Are the clients (I mean the company/agency paying the contractor) legally obliged to pay up VAT that was originally zero-rated?

I have one part to pay this week. I was in Germany in 08 for a second contract engagement through a different agency. This time Germany-based agency for a German client.

I invoiced via a different MC overseas. The payments were greatly delayed by the German agency and during the delay this issue blew up. The MC did not charge VAT and so the Germany agency didn't pay it and I didn't receive it.

Will the tax assessment punish me by demanding VAT even though I didn't receive it ??

[BlasterBates]

I have one part to pay this week. I was in Germany in 08 for a second contract engagement through a different agency. This time Germany-based agency for a German client.

I invoiced via a different MC overseas. The payments were greatly delayed by the German agency and during the delay this issue blew up. The MC did not charge VAT and so the Germany agency didn't pay it and I didn't receive it.

Will the tax assessment punish me by demanding VAT even though I didn't receive it ??

I would see a lawyer on that one. The authorities will want the VAT from somewhere, maybe the MC. If the MC is not a German registered company then you may end up liable.

[LonelyRider]

I have one part to pay this week. I was in Germany in 08 for a second contract engagement through a different agency. This time Germany-based agency for a German client.

I invoiced via a different MC overseas. The payments were greatly delayed by the German agency and during the delay this issue blew up. The MC did not charge VAT and so the Germany agency didn't pay it and I didn't receive it.

Will the tax assessment punish me by demanding VAT even though I didn't receive it ??

Your German agency must have charged VAT from the client and passed it on to the tax office anyway, even if they did not pay VAT to MC or you. So VAT for your work has been paid at least by your agency.

[xiao147]

Does anyone know if the Finanzamt can freeze (or deduct money) from your german bank account, should you be under investigation?

[LegendsWear7]

Does anyone know if the Finanzamt can freeze (or deduct money) from your german bank account, should you be under investigation?

Certainly they can freeze assets. I've heard different opinions on the point when that is permissible. As I don't know I'm not going to comment on that.

[BlasterBates]

Certainly they can freeze assets. I've heard different opinions on the point when that is permissible. As I don't know I'm not going to comment on that.

Yes they have the powers to do this. But normally only after you've had a demand for payment. It is no different to the UK in this respect.

If you're under investigation then potentially they may arrest you if they think you might hop the country, or it is serious.

[BlightyBoy]

Personally, I have discussed this directly with legal representation, and this is what they had to say:

You cannot file a "Selbstanzeige" if an investigation has been opened. This does not mean that you have to be informed, officially or otherwise. An example was cited whereby the solicitor was preparing a new filing for a client on New Years Eve and submitted the paperwork, only one hour after the Finanzamt had decided to investigate the client. The new filing was rejected and the investigation continued.

If you leave the country after an investigation has been opened, then it is most likely (according to my brief) that the Finanzamt will perceive this as "Flucht" (fleeing) and probably pursue. However, if you leave the country prior to an investigation being started, and then the investigation is opened (after you have moved away) then the likelihood is that they will not pursue - it really depends on the amounts involved.

Cross-border co-operation is of course possible, however, according to my brief, not likely. The observation there was that if the shoe were on the other foot, i.e. someone skipped the UK and returned to Germany, it is unlikely that the Finanzamt would assist a UK based investigation unless the Finanzamt had their own suspicions about the person involved.

A small piece of personal advise (from my brief), it is probably best, at the moment, to say nothing. Save away as much as you can over the coming months, and if you have been .... inattentive (to coin a phrase), wait for the Finanzamt to come to you. One thing my brief did say was that the chances of being investigated depend entirely on the case officer assigned to your file. Germans are very ... moody, as everyone of us who has had anything to do with Beamten knows, e.g, Anmelden, registering a car. It is possible that you could be lucky and get someone who is weeks from retiring, who probably won't be that bothered, on the other hand, you could get a newbie who is looking to gain rapid promotion, in which case they will hunt you down like a Schweinhund!

Clearly, if people have the money, then re-filing would be the preferred, honest, option, but if you don't ('cause it's been spent), then say and do nothing.

Furthemore, any statements that anyone has relating to offshore accounts, should under no circumstances, be destroyed. In the event of an investigation, this is the only proof you will have concerning the actual amounts. It is highly likely that the Finanzamt will approach with an amount way above what may actually have been received, and it is you who would need to prove otherwise. Send your statements on holiday (say, back to the UK) where they cannot be seized following/during a "dawn raid".

My opinions on this subject voiced in previous posts are well known, however, for those among us who are still unsure, I am clearly relating to you what a Steuerfachanwalt (Tax Solicitor) advised me when I went to see them (to clarify my own position).

In closing, the brief did make the statement that if you are/were a) with Mr. H, and b) registered with the Finanzamt in Bayern, you're probably screwed.

[SalsaFever]

In closing, the brief did make the statement that if you are/were a) with Mr. H, and b) registered with the Finanzamt in Bayern, you're probably screwed.

Does your lawyer have any advice on what we should tell if the house is visited? Should we admit it on the spot or keep it quite until they proof it.

Could anyone whose house visited recently tell the experience? What are they asking? What did you tell? What's the best strategy? I wonder how they approach and how the conservation leading to the point, assuming they have no proof at all.

The only possibility I can think of that they may ask to see your contract and ask why you are making less than the average Joe in IT along with why you are using a MC. So both questions can be answered logically.

Also I wonder, in legal terms, if these 'visits' are different than the 'raids' taken place before Christmas. I think these visits are just regular audits, usually done prior notification?