The proper legal route to contract in Germany is perfectly simple and lucrative. There won't be any shortage of contractors. I doubt that the mamangement co's saved anyone very much.
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Ok, let's do some math and define 'lucrative'!Originally posted by BlasterBates View Post
Let's say I have a friend called "John Doe" and single. Once upon time, John takes his dick and came to DE.
He makes 500 euros a day, based upon 20 work days average he makes 120,000 euros in a year. His naked tax liability (Class 1) is 45,000 euros for 2009, takes 75,000 eruos home, which translates to %37.5.
He cannot claim "secondary home allowance" because he is single and f-amt claims his 'center of life' is in DE. So he neither can deduct rent, nor his flights to UK. He doesn't like talking on phone much, so no phone bills. No internet connection. He doesn't drive in Germany, no car expenses.
Please advise "John Doe", how to turn his contract to a 'lucrative' one, of course with no help from MCs???
The bottom line is if you are single, your DE tax bill will always be a nightmare. "secondary home allowance" is almost always scrutinized especially for single people based on 'the-center-of-life' argument, if you are very very lucky, maybe you can get some reduction for the first 6 months only, even that is very very exceptional, like lottery.
I hear so often people like Bates saying 'oh it's very 'lucrative', doesn't even hurt!', then it turns out that their particular situation is completely different.
I have a associate here, he's married and 3 kids living in London. So he can save huge in taxes because he is married + allowances for 3 kids + because his family is in London, f-amt accepts his center of living is indeed in UK, so he can deduct every f*ucking penny spent in DE, including rent, flights, electricity, car + gas, plus even per diem daily allowance for food..Comment
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Don't come to Germany then!Originally posted by SalsaFever View Post
If you do, then follow some of the advice that has been given here, particularly BB and especially if you're a UK contractor don't follow the advice of your UK agent but get yourself a local tax advisor (plenty on Gulp) and you might find that you'll get a good deal. Personally as a single person contracting and doing it within the German system is pretty lucrative.“Brexit is having a wee in the middle of the room at a house party because nobody is talking to you, and then complaining about the smell.”Comment
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You've just described a lucrative contract. I don't see anything wrong with the maths. If Joe wants more he has to move to Germany, or fly back once a month, or speak to a better tax advisor to argue his case about claiming expenses.Originally posted by SalsaFever View PostLast edited by BlasterBates; 5 November 2009, 10:19.I'm alright JackComment
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By the way, "John Doe" is no way related to me and he is just a fictitious character I made up. I didn't calculate holidays, vacations and time offs any kind etc.
BB,
Thanks for the comments. I sincerely asked for your opinion. If you say "John Doe" having a good deal, I respect your word.
By the way, "John Doe" indeed talked to a number of accountants and based on the 'center-of-life' argument, he cannot claim 'secondary home' expenses and all the other things accountants suggest doesn't really fit well with his particular situation. Because he doesn't spend much, so nothing to deduct.
Flying home once a month also doesn't help, according the f-amt his center-of-livelihood is Germany. His visits to UK are considered touristic.
So he stuck with paying %38 tax. If this is a good deal and even better than Switzerland, he only thanks the Lord day and night.
"John Doe" thinks German accountants are not coming up with creative solutions, if you have any innovative solution in mind, please do share.Last edited by SalsaFever; 5 November 2009, 13:09.Comment
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There you go just a matter of knowing how good you have it
It doesn't matter where you work in Europe, in most countries it is very difficult to offset travelling expenses, mostly they won't have it regardless of whether that is the UK (non UK), Luxembourg Switzerland etc. It is roughly the same. Most legit solutions in different countries take around 35%.
That is the norm. In fact I reckon on that high a rate 150000 EUR I would put the average tax take higher than 35% because my rough rule of thumb is around 100 grand.Last edited by BlasterBates; 5 November 2009, 14:45.I'm alright JackComment
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It might be difficult, it isn't technically impossible.Originally posted by SalsaFever View Post
I know of UK agents who have obtained AUGs, as long before the taxman came knocking there were a number of multinational German companies who insisted on their "externals" being AUGed.
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