Contracting in Munich

[MojoDog]

It's generally considered to be good forum etiquette to at least get off one's 'arris and do at least some cursory digging before posting a lazy question (of which this is a prime example).

Especially as there is a whole sticky on this very topic in a very prominent place as previously mentioned.

No need to get so upset about it.

Not upset in the slightest, I didn't realise it mattered so much to you. My bad.

[Bunk]

I am a miserable failure and an embarrassment to my parents. I am sorry

Are you sure you're cut out for helping contractors tell their arse from their elbow?

[northernladuk]

Well then don't reply and move on to a more interesting post.

If every newbie asked every question that occurred to them without doing a bit of work first there wouldn't be any interesting posts.

[ASB]

If every newbie asked every question that occurred to them without doing a bit of work first there wouldn't be any interesting posts.

You mean there are some interesting posts ?

[zoco]

You Lucky bar steward!

I'd be down that Englischer Garten all day long wandering round in the noddy, primed for a bit of action:

[sunflower]

Contracting in Munich

Accepted a long term contract out in Munich on a rate of 1080 EUR per day plus 2000 EUR a month accommodation allowance plus flights.

Initially, I was intending contracting via my UK limited company for the first 6 months before considering setting up a company in Germany. But, maybe better off setting up Germany company from the start, opening up a bank account etc so i can buy goods, pay rent etc in EUR without the fee's!

Also, maybe i benefit from being VAT registered in Germany (Similar to Flat rate here in UK)

Maybe people here have experience using a partner company/Agency?

My family and home will be located in the UK and intend commuting home every weekend.

I'm aware of the 182 day and world tax rule, but not sure if I get caught with additional tax working out of Germany or if I set up in Germany am I liable for tax in the uk being uk resident etc.

Anyone recommend any German Accountants?

Appreciate any advice on this?

If you want to stay in Germany contracting for a longer project, the most efficient way is to register as a Freiberufler. Check out the threads on the forum. Get a local German accountant. There is something like IR35 (scheinselbstandigkeit) if you do not have 3 customers per year. An accountant usually costs €350 per month or so. You will normally have to take a German health insurance policy.

Other option is to go via a payroll company, paying tax and social insurance in Germany. Offtakes are 50%.

Not sure about the consequences of this for tax on your worldwide assets if you were seen as taking up residence in Germany. You need to check with an advisor.

Maybe you can start by calling a company like ECRM Europe, who offer accounting services for a few countries?
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You have a generous rate and allowance so you should have no problems finding somewhere in Munich.

[BlasterBates]

This is a longterm project so you need to register from day one in Germany.

The best way is as a Freiberufler.

The IR35 rule "Scheinselbständigkeit" is not a tax rule in Germany it is enforced by the Pensions dept. You need to take advice but it sounds like you'll be caught by the rule, i.e. one long term client. You need to talk to a German accountant about it. Unlike IR35 I believe however it is possible to pay 50% of the rate which is about EUR 500 so it isn't so bad, and you do get it back as a pension when you retire. You really need expert advice on this.

These days they're systematic they go through a computer and send everyone a letter who doesn't pay Social Insurance and you have to explain why, if you say you're self-employed they will then ask for your contract and if you have only one client they'll send you a bill and you would have to challenge it. More or less how it works. Having said that it wouldn't happen for a while and if you were never registered in the Pensions dept you might slip through. For someone who was paying social insurance they definitely would be checked.

[darmstadt]

If you want to stay in Germany contracting for a longer project, the most efficient way is to register as a Freiberufler. Check out the threads on the forum. Get a local German accountant. There is something like IR35 (scheinselbstandigkeit) if you do not have 3 customers per year. An accountant usually costs €350 per month or so. You will normally have to take a German health insurance policy.

Actually a bit of a grey area this one. I have had only 1 customer for the last 3 years (5th year on the same contract) and haven't been asked to pay this. In theory it is correct but there are other criteria which also have to be allowed for. The Finanzamt tried to get me to pay Gewerbesteuer as they believed that I was Selbstständig and not a Freiberufler so after some to and fro-ing with them and my accountant (who doesn't cost me €350 a month BTW) I just sent them a copy of my CV and they said basically said they were wrong. For example, and a collegue had to go to court to prove this, a systems programmer would be a Freiberufler whereas an applications programmer would be Selbstständig. You need to get an accountant to sort this tulip out for you otherwise you'll get stuffed and as people have stated, register from day 1!

[sunflower]

Actually a bit of a grey area this one. I have had only 1 customer for the last 3 years (5th year on the same contract) and haven't been asked to pay this. In theory it is correct but there are other criteria which also have to be allowed for. The Finanzamt tried to get me to pay Gewerbesteuer as they believed that I was Selbstständig and not a Freiberufler so after some to and fro-ing with them and my accountant (who doesn't cost me €350 a month BTW) I just sent them a copy of my CV and they said basically said they were wrong. For example, and a collegue had to go to court to prove this, a systems programmer would be a Freiberufler whereas an applications programmer would be Selbstständig. You need to get an accountant to sort this tulip out for you otherwise you'll get stuffed and as people have stated, register from day 1!

Thanks Blasterbates and Darmstadt for these clarifications.

How much are you paying for your accountant out of interest?

[gabox01]

Accepted a long term contract out in Munich on a rate of 1080 EUR per day plus 2000 EUR a month accommodation allowance plus flights.

That's sick dude. Well done!