. . Germany - the taxman cometh

[Northerner]

Answer: Germany is corrupt and they've been shoveling money into Switzerland since the War and now they want to blame inocent Tommys like me.

Tommys? Are you a former British soldier?

And why do you capitilise your words like only a German would? Phishing?

[Northerner]

It's a set-up and the all the German companies were fully aware we got a Tax break. Funny how the blame is being passed fully to us "Auslanders". I'm not a Criminal, I just went to work in Germany on the same Split system as everyone else and it was no secret.

There is no such thing as a tax break...there is tax avoidance or tax evasion.
And there is nothing illegal about splitting your income. German employees split their income into salary and pension and benefits.

[Edelweiss]

There is no such thing as a tax break...there is tax avoidance or tax evasion.
And there is nothing illegal about splitting your income. German employees split their income into salary and pension and benefits.

Yeah, whatever...
But this thread is about a Split payment that was sent out of the Country we were Resident in for Tax purposes to hide it, which was common practice and well know by the host nation.

I can't imagine Britain would've treated "Guest Foreign Workers" in the same way.

[JDee]

Finanzamt well aware of Management / Umbrella companies

I have just fallen foul of the German tax authorities as a result of bad advice on income splitting given to me by a UK company and its sister company based overseas.

The German tax authorities believe this company (along with several others) is responsible for hundreds of UK freelancer tax problems which are only in the last few months coming to light. The Local finanzamt office alone is currently dealing with more than 50 cases at this time with more being discovered every week; the problem throughout Germany could easily involve many thousands if not tens of thousands of UK freelancers.

The German tax authorities informed me that this is largely a British problem leading me to believe that such companies are exploiting the fact that under British law ‘Assisting tax evasion’ is not a crime whereas it is in Germany (and probably also in many other European countries) – hence the uniquely British flavour to this growing problem.

I am concerned that without official awareness of the problem and without some sort of action to curtail the activities of such UK companies then there will be a deluge of UK freelancers facing legal procedures they are unprepared for, time in prison because they are unable to meet unexpected tax bills, potential bankruptcy and maybe in extreme cases suicide. I am sure everyone would be keen to help prevent such a situation in any way it could.

Some ideas/suggestions

1) Assess the advice posted on relevant web-sites to offer a warning against such companies

2) Identifying a UK based standards body that would be able to regulate the activities of such companies and perhaps take legal action against them.

3) Raising the matter with relevant UK authorities (contact your MP in the first instance) such that 'Assisting tax evasion' could be made into a legal offense in the UK to prevent these companies from operating and potentially allow the individuals concerned to be extradited to Germany (they cannot be extradited at the moment as they have committed no crime under UK law)

4) Make official representation to the German authorities to gain a better understanding of what is becoming a huge problem for large numbers of UK citizens

5) Contact English speaking Steurberaters and Lawyers to make them aware of the problem so that they may be in a better position to properly advise their clients in this respect. The Steurberaters and Lawyers are largely unaware of the activities of their clients in this respect, preventing them from being able to properly inform them in a timely manner, and the clients don't think they have anything to discuss in this matter with their Steurberater or Lawyer.

6) Spread the word generally in whatever manner is available

[BlasterBates]

Yup British companies are the cause of much hardship. However this won't result in jail as that would have to be over a million back tax I think.

[darmstadt]

Yup British companies are the cause of much hardship. However this won't result in jail as that would have to be over a million back tax I think.

Oooh, I don't know. A mate of mine never paid a DM3000 fine some time back and got sentenced to 30 days prison, DM100 for each day. Some might go just to make an example...

[BlightyBoy]

There is no such thing as a tax break...there is tax avoidance or tax evasion.
And there is nothing illegal about splitting your income. German employees split their income into salary and pension and benefits.

Unless you work for the EPO, or ESA... then there's a tax break.

But otherwise...

nope.

[BlightyBoy]

Conspiracy?

No, I don't think that is the case.

I fear the facts are less insidious. Essentially, there is a shortage of technical staff in germany - you only need to read the papers and watch telly to know that.

There is a surplus of technical staff in Britain, and, for one reason or another, cultural or otherwise, Brits are more willing to upsticks and move to better prospects than certainly the germans.

This is not a "british" problem per-se, rather symptomatic of the cultural differences and market forces. There are more british ex-pats working in technical fields in Germany than any other nation and consequently we are "higher" profile.

Boring it may be, but there it is.

[BlasterBates]

Oooh, I don't know. A mate of mine never paid a DM3000 fine some time back and got sentenced to 30 days prison, DM100 for each day. Some might go just to make an example...

Yes you go to jail if you don't pay your fine, but there they slap in you until you cough up. Different to tax evasion where you generally get a fine or suspended sentence (above 100 grand I think).

[BlasterBates]

Just add there are plenty of non-British foreigners working as contractors in Germany but most go through the German system. British contractors get put onto management co's by their agencies. Whereas other foreigners such as Americans tend to set up as a freelancer.