Originally posted by peterparker
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IT Contract in Germany, work based mostly out of home in UK
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Originally posted by peterparker View PostSo, in my case, if I continue to work only up to 10 days a month in Germany, would it take up to 19 months to exceed 183 days in Germany? (Just a theoretical question - my contract may not even exceed 4 months as it stands now.) Is my understanding correct? Or is this 183 days within a calendar year and that it may never get exceeded?
In your case the the potential (and I stress potential) tax bill will be based on the proportion of time you spend in Germany. Lets say you have a contract over 8 months and spend 50% of your time in Germany, then 50% of your earnings would be potentially taxable in Germany.
If you just come over for business meetings then this wouldn't classify as earnings.
Suffice to say keep your time in Germany to a minimum and perhaps spend half-a-hour with a German tax advisor just to make sure you don't fall foul of the regulations.I'm alright JackComment
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Originally posted by peterparker View PostHi Boo, what do you mean by reverse charge the VAT?
Can anyone else please confirm Boo's views? Thanks.
Basically you charge zero VAT on your invoice (keep the VAT line but make the VAT% and amount zero) then you add a magic incantation to the invoice something like the following :
Levy of VAT reverse charged to CustomerCo VAT Ref. CCnnnnnnnnnn in accordance with Article 196 of EU Directive 2006/112/EC on the common system of value added tax.
But the question I am raising is whether a normal agency is actually the "customer" in terms of VAT-ability because you are not actually delivering the software to AgencyCo but to CustomerCo (== ClientCo).
You will probably be best off asking HMRC via their helpline and I would try to get a written reply from them if I were you.
Hth,
BooComment
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Originally posted by BlasterBates View PostYou are actually taxable on all German sourced income regardless of how long you've been there. The 183 days has wider implications in that you are then resident in Germany and will be taxable on all income.
In your case the the potential (and I stress potential) tax bill will be based on the proportion of time you spend in Germany. Lets say you have a contract over 8 months and spend 50% of your time in Germany, then 50% of your earnings would be potentially taxable in Germany.
If you just come over for business meetings then this wouldn't classify as earnings.
Suffice to say keep your time in Germany to a minimum and perhaps spend half-a-hour with a German tax advisor just to make sure you don't fall foul of the regulations.
Let me try to get some clarification. Assuming a person gets a IT contract through a UK recruitment agent and the client is in Germany. Again assuming the client lets the contractor work from home (in UK for example) for the entire contractual period except for business meetings onsite (assuming only up to max 5 days in a whole month and also assuming a few months no onsite visit in Germany), then they wouldn't classify as earnings?Comment
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Originally posted by BlasterBates View PostYou are actually taxable on all German sourced income regardless of how long you've been there. The 183 days has wider implications in that you are then resident in Germany and will be taxable on all income.
Any EU company (yes even your little one-man-band contracting firm) has the right to send an employee (thet's you, even if you are also a director) to work in any other EU country for up to 183 days each year without entering into the tax system of the destination country.
This is a simple fact and it is a treaty obligation that even the mighty German nation must comply with. The Kings of Denmark and of Belgium have recently found out the truth of this, to their cost.
BooComment
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Originally posted by Boo View PostSee here : VATPOSS14100 - Reverse charge: introduction
Basically you charge zero VAT on your invoice (keep the VAT line but make the VAT% and amount zero) then you add a magic incantation to the invoice something like the following :
Where CustomerCo is the company you are delivering the software to / invoicing and CCnnnnnnnnnn is CustomerCo's VAT number (not YourCo's VAT number).
But the question I am raising is whether a normal agency is actually the "customer" in terms of VAT-ability because you are not actually delivering the software to AgencyCo but to CustomerCo (== ClientCo).
You will probably be best off asking HMRC via their helpline and I would try to get a written reply from them if I were you.
Hth,
BooComment
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Originally posted by peterparker View PostMany thanks for your response.
Let me try to get some clarification. Assuming a person gets a IT contract through a UK recruitment agent and the client is in Germany. Again assuming the client lets the contractor work from home (in UK for example) for the entire contractual period except for business meetings onsite (assuming only up to max 5 days in a whole month and also assuming a few months no onsite visit in Germany), then they wouldn't classify as earnings?
Otherwise every other businessman travelling to DE from another country would need to be taxed there as well, which would be ridiculous.Comment
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Originally posted by Boo View PostThis is not correct and BB seems to have a perpetual blind spot that make him repeatedly misrepresent the situation :
Any EU company (yes even your little one-man-band contracting firm) has the right to send an employee (thet's you, even if you are also a director) to work in any other EU country for up to 183 days each year without entering into the tax system of the destination country.
This is a simple fact and it is a treaty obligation that even the mighty German nation must comply with. The Kings of Denmark and of Belgium have recently found out the truth of this, to their cost.
BooLast edited by BlasterBates; 18 January 2014, 22:14.I'm alright JackComment
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Originally posted by Boo View PostThis is not correct and BB seems to have a perpetual blind spot that make him repeatedly misrepresent the situation :
Any EU company (yes even your little one-man-band contracting firm) has the right to send an employee (thet's you, even if you are also a director) to work in any other EU country for up to 183 days each year without entering into the tax system of the destination country.
This is a simple fact and it is a treaty obligation that even the mighty German nation must comply with. The Kings of Denmark and of Belgium have recently found out the truth of this, to their cost.
Boo
Last edited by Contractor UK; 31 July 2021, 14:45.Comment
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Originally posted by peterparker View PostMany thanks for your response.
Let me try to get some clarification. Assuming a person gets a IT contract through a UK recruitment agent and the client is in Germany. Again assuming the client lets the contractor work from home (in UK for example) for the entire contractual period except for business meetings onsite (assuming only up to max 5 days in a whole month and also assuming a few months no onsite visit in Germany), then they wouldn't classify as earnings?I'm alright JackComment
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