Tax status, Germany / UK - is this dodgy?

[scooterscot]

I'm UK tax payer living in Germany approaching the 183 day mark. I've been here since April. My German client is possibly happy for me to work the remainder of the year from home back the UK and return in the new-year when the German tax year begins. What wrong with doing this?

[Olly]

er..what's right with it?
Don't you need to go back in the UK for a clear 184 days to make it ALL fine and dandy?

[scooterscot]

er..what's right with it?
Don't you need to go back in the UK for a clear 184 days to make it ALL fine and dandy?

Then whose tax year have I been in? I've neither been in the German or UK tax year for a clear 184 days.

The German tax year is from Jan-Dec.

[Olly]

Then whose tax year have I been in? I've neither been in the German or UK tax year for a clear 184 days.

The German tax year is from Jan-Dec.

Well you see that's were it gets complicated dear chap and I'm afraid I don't know the answer (though I'd like to)

All I can say is, if you want to pay UK tax only then do 184+ days year in the UK in the UK tax year and then it's all simples beyond that it's less simples.

[BlasterBates]

Presuming you´re self employed, where you pay tax is where you register your business. It has to be registered somewhere.

I would take advice on this one from a reputable German accountant, because if you come back and do this regularly the Finanzamt may come sniffing around at some point, and you really want to be sure that you´re not liable for tax, because if they decide you are you´ll really end up completely out of pocket. In fact it´ll be as though you never earned anything.

It isn´t simply a matter of whether you were tax resident, but whether the centre of activities of the company you´re working through is in Germany; you really need to check this with an accountant if you keep coming back that the German authorities won´t decide to tax the work you did in Germany. The rules can be ill defined and you can bet the Finanzamt will interpret in their favour, that´s why you need an accountant to check this for you.

The only really safe way to operate in different countries is to tax the work you actually do there in the country.

[doodab]

There is nothing wrong with doing it, but you will still be tax resident in one, and quite possibly both, countries (which means you fill in two tax returns, you won't have to pay tax twice).

From the sound of it, you won't be considered non-resident in the UK, as you need to leave for a least a whole tax year for that to happen and you also need to average less than 91 days a year here during the time you are absent.

I don't know what the Germans will say but I know that they can count the 183 days over the end of a tax year. BTW it's less than 183 days, so the limit is actually 182. They can also look at whether you have a home in Germany and so on I think.

It's likely you will end up being taxed in one country and claiming relief in the other, so best to get some accountants on the case and figure out what your best options are.

[scooterscot]

thanks for he replies people -

[chef]

give the guys at Expat Tax a call, english speaking and come highly recommended