Contracts in Germany

[The Lone Gunman]

The client is likely to be helpful too.
If you are found to be an employee they get stuffed too.

I have never heard anybody say what Edelweiss said about offices and equipement and I have spent about 7 of the last 10 years in Germany.

You are looking to be contracted as an engineer or a consultant. To be recognised as that you need quals and/or a track record. You also need a recognisable skill set that knits with the clients needs. It is a lot harder to claim consultant if you have worked C on various applications. C in banking or avionics shows focus. Do you see?

Work packages are best, but you can still be a consultant on an hourly paid general contract.

You must talk to a local tax advisor.

[chef]

I am in almost exactly the same situation as the OP.

I work in Munich for a single client registered in Germany as a freelancer, I bill by the hour, my contract is at present 3 months but I work on a project by project basis with milestones and project deadlines but how I provide the solution is under my control. I use clients equipment but that is simply because it is a secure network and external laptops are not allowed on it.

I have an english speaking local german accountant (who came highly recommended by those on toytown germany) and was advised:

- that as long as I maintain residence (i.e bills etc.) in the Uk I can claim that my home residence is uk and therefore claim travel to/from german residence/work and german residence rent as a business expense as I would not be making this expenditure if I was not working in Germany (which makes sense as a basic definition of a business expense)
- I dont charge VAT as the agency I bill is uk based
- I have a german bank account, have registered my address in germany with the local gov and pay german taxes
- My german rental contract is aligned with my work contract (i.e same period and same notification period) and therefore will end whenever my contract ends

HTH

[Edelweiss]

Don't forget the people telling you this is OK are all being paid by you.

When I had a problem there was a stone wall of silence from the Agent, Account, Client Co. and even your "Friends" doing the same job as you that were not targeted.

Germany should have a proper system for Foreign Contractors and stop behaving like the Gestapo.

[Edelweiss]

I am in almost exactly the same situation as the OP.

- I dont charge VAT as the agency I bill is uk based
- I have a german bank account, have registered my address in germany with the local gov and pay german taxes

HTH

Are you paying German Tax on your Ltd. Co. income?

If not this will be considered the same as a Spit System because all your income is sourced in Germany, regardless of what you've been advised.

I know people that did that and are being asked for 100K's
in back tax. The ones that had property in German already had to pay up.

[Northerner]

Are you paying German Tax on your Ltd. Co. income?

I think you've been smoking too much 'white' Edelweiss.

There's nothing in chef's post that says he has a Limited Company.

[BlasterBates]

Are you paying German Tax on your Ltd. Co. income?

If not this will be considered the same as a Spit System because all your income is sourced in Germany, regardless of what you've been advised.

I know people that did that and are being asked for 100K's
in back tax. The ones that had property in German already had to pay up.

No it is possible, but the Finanzamt could bite you as the rule only applies to professional services billed abroad, if they reclassify it you'll have to pay VAT. I was once in a very similar position, thinking about billing in Luxembourg and maintaining German residency. As a result of this uncertainty I decided to go for a Lux solution.

[Edelweiss]

I think you've been smoking too much 'white' Edelweiss.

There's nothing in chef's post that says he has a Limited Company.

Isn't billing an Agent "Invoicing" then?
And why would VAT be an issue if you were an Employee?

What's in those pies you eat up there?