Contracting in Germany

**GeekyGrandad** · 14 May 2012, 21:31

Originally posted by mimesedit View Post

Hi all,

Newbie on the board so hello to all.

I am about to take on a contract in Germany and I was wondering if anyone can recommend what my best option would be in terms of good service and maximum (legit) retention.

The two options I have investigated so far are

1: Management companies - CPM People and AFSS (any other recommendations please advise)
2: Freelancer - working with my own personal tax consultant/accountant

The contract is for 12 months thus if anyone can help with advice on what my best option here is, it would be greatly appreciated..
Thanks

Mimes

Find yourself a local accountant who will quickly set you up as a true "freelancer" (yes, they actually have that legal status and can't have another deemed upon them). The allowances are very good and flexible (I was able to claim capital equipment bought in the UK for instance) and the tax bands aren't that onnerous. Tax paid over there is offset against UK tax but German tax authorities will require an assessed amout up front - no getting around that. Normally about 35% of half year (two six month assessments).

When the work was done and final figures presented, I got a substantial rebate.

**nr152522** · 29 June 2012, 10:05

Hi there,

Just thought I'd jump in for a bit of advise. I have been offered a contract in Germany and planning on registering as a freelancer.

However, I will be traveling back to the UK very often, in fact, I will likely to spend 3 days working on site in Germany and 2 days working in UK (plus 2 days on the weekend).

As I understand, I will have to pay UK taxes as well. How does this work? Is it just the difference? i.e. if I am taxed ~35% in Germany, and UK tax is 40%, then I pay the remaining 5%? (as a simple example)

Many Thanks!
nr152522

**Brussels Slumdog** · 29 June 2012, 14:08

Double taxation.

Originally posted by nr152522 View Post

Hi there,

Just thought I'd jump in for a bit of advise. I have been offered a contract in Germany and planning on registering as a freelancer.

However, I will be traveling back to the UK very often, in fact, I will likely to spend 3 days working on site in Germany and 2
Many Thanks!
nr152522

days working in UK (plus 2 days on the weekend).

As I understand, I will have to pay UK taxes as well. How does this work? Is it just the difference? i.e. if I am taxed ~35% in Germany, and UK tax is 40%, then I pay the remaining 5%? (as a simple example)

Is is not that simple- In Germany social security contributions are tax deductible and the tax rates are higher, so I doubt whether with a good accountant you would pay extra UK tax. If you become a german resident then you may end up paying additional german tax.

The Germans count the first day you arrive in the country to the day you leave as resident days, even over two fiscal years . The fact that you go home during the weekend is irrelevant.

Germany individual income tax rates ,2012

Tax % Tax Base (EUR)
0 Up to 8,004
14% 8,005-52,881
42% 52,882-250,730
45% 250,731 and over

Contracting in Germany