Germany and IR35

[suityou01]

Just got my contract through. First reaction was that it did not mention my limited company. At all.

It referenced me as the consultant.

I'm clearly going to have a tough time explaining IR35 to these chaps. Anyone else experience this?

Does IR35 apply to working in Germany?

[chef]

Suity,

are you working via your uk ltd in Germany?

are you going to be spending more than 183 days on german soil (this includes sunday evenings that you land)? if so you are german tax resident.

wouldnt it be more tax efficient to work as a freelancer in Germany, pay german taxes and then using the double taxation agreement between uk-germany, declare the income in the uk but pay no uk tax on it?

when in germany are you planning to rent or stay in a hotel? if renting, be aware then that the german tax know where you live.

[chef]

if you are working via uk ltd in germany then I cant see HMRC having a conversation with Hans at client co regarding your working practices although IANAL.

[suityou01]

Contract is for 3 months. I was planning to use my ltd. I am planning to rent an apartment.

[chef]

Contract is for 3 months. I was planning to use my ltd. I am planning to rent an apartment.

if you rent an apartment those details are then passed to german tax authorities. so they will know where you live.

you work contract details are also passed to the authorities, so they know where you work.

if you stay longer than 6 months your name will appear on someones list of possible tax avoiders and you will likely receive a knock on your door at 7am asking you to prove the exact date and times of flights to the country with a large financial penalty and backdated tax plus interest for their efforts.

just so that you know if you are considering taxing that extension.

[Ignis Fatuus]

if you are working via uk ltd in germany then I cant see HMRC having a conversation with Hans at client co regarding your working practices although IANAL.

PMFJI, but how does this look?

1. The purpose of IR35 is to identify and tax accordingly, cases where, if it were not for the intermediary (your Ltd Co) the relationship with the client would be one of employment.
2. The default position of the German client is that you will be a Freiberufler, i.e. self-employed professional; not employed.
3. Therefore, if you persuade the client to agree to contract with your Ltd Co instead, it cannot logically be said that if it were not for the intermediary, the relationship with the client would be one of employment. Because, by definition, if it were not for the intermediary, the relationship with the client would be one of Freiberufler.

[jamesbrown]

PMFJI, but how does this look?

1. The purpose of IR35 is to identify and tax accordingly, cases where, if it were not for the intermediary (your Ltd Co) the relationship with the client would be one of employment.
2. The default position of the German client is that you will be a Freiberufler, i.e. self-employed professional; not employed.
3. Therefore, if you persuade the client to agree to contract with your Ltd Co instead, it cannot logically be said that if it were not for the intermediary, the relationship with the client would be one of employment. Because, by definition, if it were not for the intermediary, the relationship with the client would be one of Freiberufler.

Not a chance Absent the intermediary, the contractor isn't actually employed by the end client. It's about whether the relationship (contract and working practices) bears the hallmarks of employment, as dictated by IR35 case law. It involves a hypothetical contract between the worker and client. Thus, it really makes no difference how one authority or another chooses to label anything. The usual rules apply.

[darmstadt]

Contract is for 3 months. I was planning to use my ltd. I am planning to rent an apartment.

I don't think you are planning to rent an apartment. To do that you're going to need a lot of bumpf, i.e. a letter from your employer to state that you are employed, a German bank account, 3 months rent as deposit, finding a bloody apartment, be prepared to decorate either when you move in or out, it might well come with no kitchen, bathroom fittings or even lights. Stay in a hotel or look here:

Boarding (comes with kitchen, etc.)
Herzlich Willkommen | Campus Lounge

In the heart of the city of Paderborn and its peripheral districts, 25 hotels, residential hotels, inns and guesthouses offer a total of approx. 1200 beds of all categories from simple to first class.
Other establishments with a total of approx. 1700 beds can be found in the Paderborn Region, at a distance of between 10 km and a maximum of 35 km from the city centre.

[suityou01]

I don't think you are planning to rent an apartment. To do that you're going to need a lot of bumpf, i.e. a letter from your employer to state that you are employed, a German bank account, 3 months rent as deposit, finding a bloody apartment, be prepared to decorate either when you move in or out, it might well come with no kitchen, bathroom fittings or even lights. Stay in a hotel or look here:

Boarding (comes with kitchen, etc.)
Herzlich Willkommen | Campus Lounge

Not that I dispute the advice, as I clearly don't but what on earth is the point of sites like flatmix.de? They even have an English version? Why do this if the barrier to entry is so high as to make it impossible/just not worth it?

[darmstadt]

Not that I dispute the advice, as I clearly don't but what on earth is the point of sites like flatmix.de? They even have an English version? Why do this if the barrier to entry is so high as to make it impossible/just not worth it?

Looking at that site, they just seem to be an online renting agency, same as immobilienscout24.de but I did notice that some places only wanted 1 months rent as deposit and then there was this:

Wenn FLATmix Ihnen einen Mietvertrag nachweist/vermittelt, wird eine Provision fällig. Bei unbefristeter Miete beträgt die Mieterprovision 1,785 der Monatsmiete. Bei Miete auf Zeit unter 9 Monaten, kann die Mieterprovision von 0,357 bis 1,785 der Monatsmiete betragen, abhängig von der Mietzeit, Mietdauer und Nutzungsdauer (siehe Provisionstabelle). Die Provisionen sind jeweils inklusive MwSt. Ratenzahlung ist nach Absprache möglich.

You'll also notice that some apartments the rent was just that (kalt) which means you need to factor in the utilities and some weren't. You might actually get lucky there though as you'll get a fully furnished place and won't have to decorate but you'll need to make sure that you understand the site properly. I was lucky working down near Stuttgart as I also looked at renting but decided to use an apartment hotel instead as I had already rented a second place when working near Munich and it worked out just as expensive.