First contract in Germany

[sshanmug]

Hi All,

I just started my own limited company in UK and my first contract is likely to be in Germany for 6 months.

If I work in Germany for 6 months will it affect my taxation for UK company? or should I pay tax to German government?

Expecting your responses.

Thanks in Advance,
Sshanmug

[BlasterBates]

You can work for up to six months and pay tax in the UK.

You can declare yourself as a Freiberufler (using a German tax consultant), and check on VAT. A lot of contractors get caught out on VAT.

To work as a Freiberufler in Germany requires no company registration, one or two clients are reluctant to work with Freiberufler, but generally it isn't a problem, and then hand in a tax form at the end of a year, filled out by the German tax consultant.

Probably easiest to work through your Ltd, but do double check the VAT.

[aj1977]

Hi All,

I just started my own limited company in UK and my first contract is likely to be in Germany for 6 months.

If I work in Germany for 6 months will it affect my taxation for UK company? or should I pay tax to German government?

Expecting your responses.

Thanks in Advance,
Sshanmug

Also remember if you are here in the UK on HSMP, then being outside for more than 6 months in 5 years will reduce your chances for ILR

[tim123]

You can work for up to six months and pay tax in the UK.

You can declare yourself as a Freiberufler (using a German tax consultant), and check on VAT. A lot of contractors get caught out on VAT.

To work as a Freiberufler in Germany requires no company registration, one or two clients are reluctant to work with Freiberufler, but generally it isn't a problem, and then hand in a tax form at the end of a year, filled out by the German tax consultant.

Probably easiest to work through your Ltd, but do double check the VAT.

No you cannot just declare yourself as a Freiberufler. To be a Freiberufler you must have a contract that states what is to be delivered.

If you have a "turn up and do whatever we ask you to do" contract, you are stuck.

You are right, many companies will have no problem with giving you a contact written with a deliverable, but you will have to make sure that is what you have.

tim

[BlasterBates]

This is not true at all Tim123. As a Freiberufler you must carry out an activity comprable with that of an Engineer. If you have a degree this is not a problem. There is not even a formal registration process. Did you make the mistake of registering yourself as a Gewerbe? It is possible to be a Freiberufler and "Sozialversicherungspflichtig", of course but that is a different matter is not handled by the Finanzamt. If you don't have a degree the Finanzamt may declare you a Gewerbe and demand "Gewerbesteuer".

I spent several years as Freiberufler and I certainly didn't have a deliverable, it was a Beratungsvertrag, which is perfectly acceptable. I sent this to the FInanzamt and they accepted it.

Aif you have never been employed in Germany then they won't investigate,because this is handled by the Krankenkasse, that are alerted when someone suddenly stops paying to become "Selbstständig", self-employed.

Take advice from a Steuerberater.

Or check out this website where 65000 Freiberufler are registered.

I think if there are 65000 Freiberufler practising without a problem you can probably too.
60000 Freiberufler

[sshanmug]

Also remember if you are here in the UK on HSMP, then being outside for more than 6 months in 5 years will reduce your chances for ILR

Thanks for your response. I am in UK on HSMP. The contract is for 6 months. So I think that wont be a problem. Even If i fail for ILR, i guess i can extend it for another 3 more years and then apply for ILR .. is my understanding correct?

Also, I read some where that I am director for my own ltd company, I cant move outside UK for work. Is it true?

Waiting for your response.

Thanks,
Senthil

[aj1977]

Thanks for your response. I am in UK on HSMP. The contract is for 6 months. So I think that wont be a problem. Even If i fail for ILR, i guess i can extend it for another 3 more years and then apply for ILR .. is my understanding correct?

Also, I read some where that I am director for my own ltd company, I cant move outside UK for work. Is it true?

Waiting for your response.

Thanks,
Senthil

Hi,
ILR is indefinite leave to remain which allows you to stay and work in UK wihout a visa.You can apply for it only when you have been in the UK for 5 years with you not being out of the UK for more than 3 months together in a year and not more than 6 months cumulatively over the 5 yr period.

So your 6 month contract in germany might exhaust your 6 month limit and ur ILR clock will restart..So its upto you really..
Cheers
AJM

[darmstadt]

This is not true at all Tim123. As a Freiberufler you must carry out an activity comprable with that of an Engineer. If you have a degree this is not a problem. There is not even a formal registration process. Did you make the mistake of registering yourself as a Gewerbe? It is possible to be a Freiberufler and "Sozialversicherungspflichtig", of course but that is a different matter is not handled by the Finanzamt. If you don't have a degree the Finanzamt may declare you a Gewerbe and demand "Gewerbesteuer".

I spent several years as Freiberufler and I certainly didn't have a deliverable, it was a Beratungsvertrag, which is perfectly acceptable. I sent this to the FInanzamt and they accepted it.

I've been Freiberuflich here for some years and recently got 'investigated' by the Finanzamt as I don't have a degree nor could prove any qualifications. After a bit of to and fro-ing they gave in when I went all technical. If not, then I would have to pay Gewerbesteuer. There are a number of other rules which also make you qualify as a Freiberufler (I believe that there are 6 basic and you have to cover 3 of them, i.e. work for more than one company at a time.)

You do need to get a tax number an UwSt number to use here. A company called Trust7 will actually set-up a UK LTD. to use in Germany and can help you, probably, but I don't do that tulip as I live here permanently.

Aif you have never been employed in Germany then they won't investigate,because this is handled by the Krankenkasse, that are alerted when someone suddenly stops paying to become "Selbstständig", self-employed.

Take advice from a Steuerberater.

Or check out this website where 65000 Freiberufler are registered.

I think if there are 65000 Freiberufler practising without a problem you can probably too.
60000 Freiberufler

GULP is actually pretty good as I've got work from there, in fact I think its a lot better than Jobserve (they even have part in English and you can upload your CV and point out its English.) I pay €120 for their premium service which gives me quite a bit of information and puts me at the head of the queue.

As BB says, talk to a Steuerberater as German tax is a fine and complicated thing and changes from year to year, and even during the year!

[BlasterBates]

German tax is a fine and complicated thing and changes from year to year, and even during the year!

Never a truer word said