. . Germany - the taxman cometh

[SalsaFever]

Thanks for the update.

Actually main source for this sort of news are circle of friends, collages in current / former companies, accountants etc.

My contacts were mostly among those hit by the second wave (triggered by the famous accountant Mr.H resides near frankfurt, whereas first wave was O2 and associates) and most are now in proceedings.

Those recent ones you mentioned should be some newbees, I don't think if there is anyone left from Mr.H's list who is not raided so far.

If you know someone from H. client list and still not raided and still insists to stay in Germany, well, that person is the dumbest of the dumbs..

I am just curious, which companies hit last week? did they come to office or residences?

I was wondering if there is any company left in munich who is accepting non-AUG contracts anymore

I know of at least six new raids in Munich alone in the last few weeks - and I would estimate the number of cases as more like tens of thousands nationwide. Lesson to be learned: don't come to Germany as a contractor. Whatever you do to set yourself up ( uk limited, brolly, freelancer declaring all income in Germany) you can and will get screwed over. If you are caught up in this mess and haven't had a knock at your door consult a german lawyer before it is too late.

[Edelweiss]

Spitfire

They always raid in July so they can Bang you for that year as well...

[Batman28]

Hi Guys,

Just wondering if anyone out there has got any old Albany documentation?
Contracts, information packs, adverts in contractor magazines and anything else.

Basically anything that helps us prove that Albany was (or at least looked to us) like a legitimate company and which has the implication that Albany were advertising a legal tax avoidance solution in Germany.

If you have anything that you would be willing to share, please get in touch.

Thanks in advance...

[SalsaFever]

Why would you need such proof since it wouldn't change anything? According the f-amt, you are guilty and you should pay regardless whatever false assumptions sold to you by albany or any other management company.

Actually f-amt is not after them, since the management companies are well protected and established in offshore locations.

You can privately sue albany and good luck with that...

I don' think you are a troll, but there is such thing like f-amt is very eager to collect any sort of documentation regarding the management companies. It's not unheard of that they might use unsuspecting contractors to obtain such info.

[gekob]

they will never change

I spent some time contracting in Germany back in 2002, using an umbrella company.
It was for a 6 month contract from Nov01 to Apr02. Bearing in mind, the german tax year runs from Jan-Jan.
The agency at the time made me register with the local authorthies and tax from day one.
And having been new to contracting, I did.

Cut a long story short, I didn't like the job and decided to leave after 3 month end of Jan.
As far as I understood at the time, I never workin in Germany for more than 6 month in any tax year and was therefore tax free in Germany.

well, the finanzamt didn't see it that way and wanted income tax based on my Nov/Dec income FOR THE FULL year. I told my tax advisor to tell the Finanzamt to kiss my a** and changed my address in the UK. That was the last I heard of them but it wasn't pleasant for a few years coz I never found out what happened in the end.

Bottom line is, unless you're happy with 55% deductions - DON'T EVEN THINK ABOUT CONTRACTS IN GERMANY!!!!

[doodab]

I've been here a couple of years now and I've found it a lot easier to deal with that people seem to make out. I think the secret is to avoid UK based umbrella / dodgy "tax efficiency" schemes and get a proper German "Steuerberatur" to deal with your tax affairs. These are the same tax accountants used by the general populace, and they charge by the hour at from what I can make out is a government determined rate.

The Germans do want to know about all of your income, this is true, in order that they can determine the correct rate of tax for the parts of it that are taxable in Germany, if indeed any of it is. This works both ways, if you become tax resident in Germany coming from the UK you will most likely remain tax resident in the UK for at least one tax year and will need to fill in a UK tax return, which includes declaring your income in Germany, even though you may not be due to pay anything to the IR.

[BlasterBates]

well said doodab, the problem isn't the German authorities, the problem is unscrupulous UK based management co's.

I contracted in Germany for 5 years, and there's no problem, or even a hint of a risk, and with a take home of approx 65%. Well apart from Sozialversicherung but I even got an enquiry from them and they didn't query my self-employment. But that isn't any different to IR35.

Yes and you can talk to the Finanzamt and they're not gargoyles, you can arrange to pay late in installments, and you can successfully challenge they're decisions through their appeals processes, without going to court.

The key is to be a Freiberifler, with a local reputable "Steuerberater". Then you'll discover Germany is no different to the UK.

[darmstadt]

well said doodab, the problem isn't the German authorities, the problem is unscrupulous UK based management co's.

I contracted in Germany for 5 years, and there's no problem, or even a hint of a risk, and with a take home of approx 65%. Well apart from Sozialversicherung but I even got an enquiry from them and they didn't query my self-employment. But that isn't any different to IR35.

Yes and you can talk to the Finanzamt and they're not gargoyles, you can arrange to pay late in installments, and you can successfully challenge they're decisions through their appeals processes, without going to court.

The key is to be a Freiberifler, with a local reputable "Steuerberater". Then you'll discover Germany is no different to the UK.

Exactly what the above 2 posts say and what some of us have been saying for a long time. I too had some queries from the Finanzamt but that was all sorted by having my Steuerberaterin talk to them. In fact the only time I ever came across 'Management Companies' was when working through a UK agency who tried to insist I went through one. I told them that not only were they pretty much illegal here but the whole set-up was very dodgy and would come back to haunt those contractors who used them.

As for the famous Mr. H...I did come into contact with him some years ago as I thought maybe having a Steuerberater with a command of the English language might help to explain some of the more obscure elements of German tax law. However when we looked at the way he operated it was obviously a no-no (plus he was bit strange.)

[Boo]

The key is to be a Freiberifler, with a local reputable "Steuerberater". Then you'll discover Germany is no different to the UK.

But it is presumeably possible to do 6 months work in Germany under the 183 days rule through your UK Ltd Co, right ?

Boo

[SalsaFever]

I spent some time contracting in Germany back in 2002, using an umbrella company.
It was for a 6 month contract from Nov01 to Apr02. Bearing in mind, the german tax year runs from Jan-Jan.

If you pay taxes of those months worked in Germany, you should be fine.

I know people in very same situation, asked to declare their foreign income before they moved to the germany and after they moved out of germany, among other things.

After carefully reading the law, their tax attorney made an objection that the world wide income decleration rule only applies after you settle down in Germany, meaning if you have income in UK while you live in Germany, then you have to declare that..

The key is to do an/abmeldung promtly.. Before the anmeldung, you are not exist according to the german tax law, so they can not take you to the court, but f-amt always try to put some pressure on people, since they know you have other dirty underwear e.g. being used a management company along the way..

You just have to remind them the fact, through your attorney or steuerberater, it's not their business whatever you did before being a resident in Germany.. Same thing applies when you leave the country, do the abmeldung promply, even you win the lotter ticket next day in UK, you still does not have to declare that if it happens after you abmeldung.

Basicly your obligation to do world-wide income decleration starts with the anmeldung and ends with the abmeldung.. But most foreigners are neglecting doing both, so it's providing f-amt an excuse to go extent the law and query your previous income before you moved to germany, since it's not clear when you come and when you left..