Hessen (Germany) and late late tax

**BlasterBates** · 25 May 2010, 10:55

Originally posted by Wiesbaden View Post

I've read the huge thread on splitting income in Germany but my case differs.

Moved from Namibia (I'm not African) to Hessen in late June 08 and contracted until end January 2009.

(I messed things up a bit.)

German client.
German agency (large operator).
Paid via Danish based 'management company' to German bank.

Mistakes I guess:
I registered in Hessen as alien (probably a mistake)
Danish company paid everything to German bank account (bigger mistake ?)
I did not register as freelancer
I did not charge VAT.
I rented a place, had land line and internet. I did not hide.

A while after I registered with the authority a standard 1 page letter arrived with a tax number. I did nothing with it.

I de-registered when I left the country (very recently).

That was the last I ever heard from German authorities. I plan to withdraw all money from Germany imminently.

What about tax? Am I kidding myself that this is 'forgotten' / small fry / not picked up / not taxable ?

I'm extremely tempted to do nothing and see what happens. Possibly keep the estimated tax under the pillow .... just in case.

I'm also totally scared to approach an accountant and find out that I'm in mega-deep-trouble for being so late and didn't charge VAT or register as a freelancer so get severely hammered.
With hindsight I messed up but now I don't want to be destroyed for it.

It was around 510 euros/day if the scale makes a difference.

PLEASE PLEASE .... any advice from fellow contractors who actually know the German scene. I'm somewhat open to making good on the tax but not if they go crazy.

If you are resident less than 6 months you don't necessarily pay tax but I see you stayed until now...well looks like you did become tax resident, but what were you doing between january 2009 and now?

If you were to fill in a belated tax form, you wouldn't have to fear fines or prosecution, just interest on taxes owing. Your 2009 tax form isn't even late, and the 2008 tax form is not even a full tax year, and is only 4 months late, in fact it isn't unusual to delay doing your tax form for a year, so your 2008 tax form isn't as late as you think.

I would just arrange for a German accountant to handle this for you, if you want to be "above board".

**darmstadt** · 25 May 2010, 16:02

I've only just paid my 2008 tax and next week pay my 2009 tax along with the Vorauszahlung for 2010. See an accountant as BB says.

**Wiesbaden** · 25 May 2010, 16:14

Thanks BB and Darmstadt. I thought the tax would be really late by now.

Between Jan 09 and recently: I wasn't working but remained in Germany.

There is a part I forget: I have no written contract with the Danish MC.

It was largely by phone with a couple of emails. All the money (less MC charge) went straight into a regular German current account. Absolutely no off-shore / funny loans / trust type stuff.

What I don't get is how the German authorities have made no contact. I could potentially disappear to India or another country where pursuit would be difficult and pay nowt. I wonder if there is a statute of limitation in German taxes? I guess it would be 10 years or even more. I think it is 7 in GB.

Hmmm, but now it just occurred to me that as far as the Germans are concerned I'm only a few months late.

How is the following going to play ?

I had no written contract (with MC).
I charged no VAT as international provision.
I didn't register as a freelanced so will I be punished with higher tax. DAMN IT.

What a mess. I think I might quite contracting and go perm next time.

**BlasterBates** · 26 May 2010, 07:11

Just one point. You don't register as a freelancer. That's the point. In other words you would be treated as a freelancer, if you were to hand in your tax form.

The way I see it you probably pay VAT and income tax that's it.

But you'd need to check with an accountant.

**Wiesbaden** · 26 May 2010, 09:37

Hmm, so I should pay 19% German VAT even though I never received a penny of it for my service ?

That is what I feared. Imagine losing an additional 19% of your invoice for bobbins.

**darmstadt** · 26 May 2010, 18:21

I wouldn't worry too much about the contract at the moment, one project I'm currently on I have no contract for and I have done other projects with no contracts (AFAIK in Germany a contract can just be verbal and a handshake, my first permie job here years ago I didn't get a contract until I had been there for 3 years.) What they will want to see are your invoices and all expenses.

Its a shame that they can ask for your bank records otherwise you could rejig your invoices to make up for the loss of 19%

Hessen (Germany) and late late tax