. . Germany - the taxman cometh

[Slumdog]

MSC will simply say 'declare it all'. I spoke to them a while back when it all kicked off.

No need to use them in the future either i think.

[tim123]

[QUOTE=darmstadt;764225][quote=BlasterBates;763805]You need to report your tax pronto, as soon as the official appears at your door it is too late, and then you're in for fines etc. You save a lot of money by reporting yourself to the authorities.

WHS. Make sure you have every single bit of paper relating to your work here such as receipts, invoices, contracts, etc. The tax authorities here have far and wide reaching powers, in some cases greater than the police, and will turn up on your doorstep at any time of day or night. You have to let them in and they will search your living abode and take anything away which resembels anything financial. They will also do this with your bank account so its better to play safe.

If it were me, I would make sure that I have my stuff packed and a plane ticket in my hand

tim

[darmstadt]

If it were me, I would make sure that I have my stuff packed and a plane ticket in my hand

tim

The problem with that is, when you next come into the country, airport only as they check your passport, you'll be banged up until you pay the fine off at €100 per day. Happened to a friend...

[Codejock]

Most managment co´s use this illegal splitting rule.

I believe I have already mentioned in a related thread that the split is not in and of itself illegal, only the failure on the part of the contractor to declare income paid in this way in their tax returns.

The best way is to become a freelancer (freiberufler) and use a local German tax consultant.

Whatever you do don´t use a UK based management company. It will cost a lot and they haven´t a clue.

When you get to Germany ask some contractors who are registered as Freiberufler.

On a general note never never rely on a management company, your first port of call should always be a reputable accountant/tax advisor..

The fundamental problem here is that many of us started our overseas gigs whilst still being resident, and tax resident in the UK. Unfortunately, we all had to rely on the advice, good or bad, from our respective agents (who in hindsight now appear to be absolutely fracking clueless). It is only once you are out here that you begin to realise how difficult things really can be - imagine a german national contracting in the UK for the first time and having to deal with VAT, NI and IR35 issues!!!

Whatever happens to people over the coming months, the lesson to be learned here is one for the agents, and for those that are listening - GET YOUR FACTS STRAIGHT!!!

Clearly they're only interested in bums-in-seats and so are not really well informed about the intricacies of german tax, NI and compliance etc. etc.

With regard to using management companies, what other choices do we have? I believe someone has already cited the relevant sections under UK Employment law relating to the use of freelancers by UK based agents. I suspect that the only way around this would be to use a German, or local-agent but then that is only possible if they are even aware of the gig....

Its all a bit of a minefield (perhaps the allies shouldn't have taken the Deaths-head signs down on Normandy beach after all....)

[BlasterBates]

I believe I have already mentioned in a related thread that the split is not in and of itself illegal, only the failure on the part of the contractor to declare income paid in this way in their tax returns.



The fundamental problem here is that many of us started our overseas gigs whilst still being resident, and tax resident in the UK. Unfortunately, we all had to rely on the advice, good or bad, from our respective agents (who in hindsight now appear to be absolutely fracking clueless). It is only once you are out here that you begin to realise how difficult things really can be - imagine a german national contracting in the UK for the first time and having to deal with VAT, NI and IR35 issues!!!

Whatever happens to people over the coming months, the lesson to be learned here is one for the agents, and for those that are listening - GET YOUR FACTS STRAIGHT!!!

Clearly they're only interested in bums-in-seats and so are not really well informed about the intricacies of german tax, NI and compliance etc. etc.

With regard to using management companies, what other choices do we have? I believe someone has already cited the relevant sections under UK Employment law relating to the use of freelancers by UK based agents. I suspect that the only way around this would be to use a German, or local-agent but then that is only possible if they are even aware of the gig....

Its all a bit of a minefield (perhaps the allies shouldn't have taken the Deaths-head signs down on Normandy beach after all....)

It isn't actually difficult at all. You just need a reputable German accountant. If you open the equivalent of a German yellow pages, and go to anyone in there, they'd be reputable, and say you want to be a Freiberufler. Only the UK based management companies are dodgy, but why should they care, they're not subject to the German tax authorities.

Basically you want the accountant's stamp on your personal and business tax returns.

[Codejock]

In principle, I agree, however that is with the benefit of hindsight.

Had you never worked in Germany , would you still have the benefit of this experience?

I agree that working through/via/with MC's is at the moment, an ill-advised solution; for those who have, or are still doing so, then there is very little that can be done about it - the damage, if you will, has already been done.

The purpose of my posting was to really get the agents into the right mindset for informing themselves more accurately about the situation here, and indeed elsewhere, (I believe the situation in Belgium is not too dissimilar). How much longer do you think agents are going to be able to make money in Germany with contracting if everybody left in the UK has had the tulips put up them so badly that they don't want to come out here?

[BlasterBates]

In principle, I agree, however that is with the benefit of hindsight.

Had you never worked in Germany , would you still have the benefit of this experience?

I agree that working through/via/with MC's is at the moment, an ill-advised solution; for those who have, or are still doing so, then there is very little that can be done about it - the damage, if you will, has already been done.

The purpose of my posting was to really get the agents into the right mindset for informing themselves more accurately about the situation here, and indeed elsewhere, (I believe the situation in Belgium is not too dissimilar). How much longer do you think agents are going to be able to make money in Germany with contracting if everybody left in the UK has had the tulips put up them so badly that they don't want to come out here?

My message is aimed at changing this situation, by pointing out how simple it is so that contractors don't get put off.

For those who've been through these schemes, unfortunately it maybe too late, but however long you've been in one you should get out and go Freiberufler.

[Codejock]

For those who've been through these schemes, unfortunately it maybe too late, but however long you've been in one you should get out and go Freiberufler.

Err... do you even know what you're talking about??

I am Freiberueflich, and was advised to become so at the start of my first gig out here. I was also poorly advised by my agent (at that time) and was with a management company (as a Freiberuefler) from the start. When starting any new gig, contractors expect the agents to earn their fracking money and give you either a) the correct advise, or b) the contact details for someone who can when the agency cannot. This was not the case when I first came out here, nor does it continue to be the case for newbie contractors in Germany.

You cannot simply pick up the german equivalent of a yellow pages and find a telephone number (cold) for an accountant in germany!! How is this even possible unless you are aware that you even need to do this!! What planet are you living on??

@BlasterBates - are you an agent refusing to take responsibility for your own culpability by not ensuring that you, and your contractors where correctly informed of the issues of contracting in Germany???

[BlasterBates]

Err... do you even know what you're talking about??

I am Freiberueflich, and was advised to become so at the start of my first gig out here. I was also poorly advised by my agent (at that time) and was with a management company (as a Freiberuefler) from the start. When starting any new gig, contractors expect the agents to earn their fracking money and give you either a) the correct advise, or b) the contact details for someone who can when the agency cannot. This was not the case when I first came out here, nor does it continue to be the case for newbie contractors in Germany.

You cannot simply pick up the german equivalent of a yellow pages and find a telephone number (cold) for an accountant in germany!! How is this even possible unless you are aware that you even need to do this!! What planet are you living on??

@BlasterBates - are you an agent refusing to take responsibility for your own culpability by not ensuring that you, and your contractors where correctly informed of the issues of contracting in Germany???

The fact that you are a Freiberufler show it is simple after all. I'm not quite sure what you're driving at. You seem to be up in arms about the Freiberufler suggestion. What is your problem Is is difficult? no...just ask a few contractors on site, or ring up a "Steuerberater" until you find an English speaking one. There are plenty around.

http://www.google.ch/search?hl=en&q=...+advisor&meta=

There you go don't even need to speak German to know how to do it.

[Codejock]

The fact that you are a Freiberufler show it is simple after all.

Only because my original MC advised me that I should do that.

You seem to be up in arms about the Freiberufler suggestion

No, I wholeheartedly agree that Freiberueflich is the way for newbie and, where appropriate, existing contractors to go.

What is your problem ... Is is difficult? no...just ask a few contractors on site, or ring up a "Steuerberater" until you find an English speaking one. There are plenty around.

There is my problem right there. Damn Agencies. They are the ones who should be giving this advise, not us. Sure, once in-situ you can ask around to find out what other people are doing and decide for yourself what is best for you. But first you have to be here, gainfully "employed" which means signed contracts, etc. etc.

The other alternative would be to come out as a permie and then switch later, but even then, you need to know who and what to ask.

At the end of the day, being with a Management Company will attract the attention of the Finanzamt. However, I have a german colleague here on site who does not work through a management company, is 120% "Inordnung" (of course he is, he's German!) and still attracts the attention of the Finanzamt!! In fact, he even had one of his returns questioned and was informed that he owed €2000! He paid it just for a quiet life.

It seems that one's mere existence will ultimately attract their attention in one form or another, sooner or later. The key is, "the split income is not illegal".

It seems that the Finanzamt can never consider themselves to be in the wrong and any attention is going to cost you, one way or another. This should in no way be taken as an indication not to register, as that itself can create a whole set of new problems (in addition to any potential tax issues), to wit, being discivered not to have registered will land you in a world of hurt.

If anyone is considering coming out to Germany on a contract, then do so, it is great out here. However, whatever form your contract takes, DECLARE EVERYTHING to avoid too much negative attention. Sure, if you work through an MC, you may get assessed sooner rather than later. But if you are 100% compliant and can prove it, you have nothing to worry about.

For those who are considering a short-term contract (< 2 years), then all I can say (as a veteran of >10 years) is that you need to decide between yourself and your conscience what to do w.r.t splitting and declaring. You might get away with it, you might not.