Beware of working in Germany!!!

[BlasterBates]

now this might sound silly, but operating as a freelancer in Germany is very simple indeed. You can do your own accounts, as long as it is clear.

You send a bill to the customer charge VAT, subtract some travelling expenses and declare that to the Finanzamt...and there aren't even any regulations on how to present it, you don't even need to register as anything just send a bill that's it and the only regulation is to fill in one box on your tax form at the end of the year that's the amount you earned. Good idea to back that up with an appended P&L statement, but not actually required, and if you make a mistake, the worst you can expect is the exchange of some correspondence with a rather tame official.

That makes the whole thing with complicated MC's even more incredulous.

I doubt you'd save very much when they've subtracted their fees.

[sshepherd]

I've just secured a contract in Germany, having contracted in the UK for several years through my Ltd company. Having googled for some advice on how to set myself up in Germany I found this thread, which is a little daunting!

I guess I have 3 options?

1. Use an umbrella company
2. Do as BlasterBates suggests, I guess I would need a German tax advisor?
3. Invoice through my UK limited company, although I guess the tax implications of this could get messy?

If anyone could offer any advice I would be most grateful.

[SalsaFever]

1. Use an umbrella company
2. Do as BlasterBates suggests, I guess I would need a German tax advisor?
3. Invoice through my UK limited company, although I guess the tax implications of this could get messy?

Here is the my opinion for each scenario:

1. Avoid management companies in Germany, they are in big time problem along with contractors using them. They are targeted by authorities and anyone will use them will be investigated. It's really RED alert here. Besides, If you use a ManCo, you are easy to track down, since they make you registred, so you become sitting duck..

2. This is the simplest and risk free solution, but you will end up paying %35 tax.

3. It's possible solution if you really stick with 180 day rule. You can tweak 180 day rule up to a year assuming you can prove that you are in/out mon-to-friday and you spent all holidays in UK.

More details on Scenario #3:

Make sure, you are not registered in Germany.

Don't rent a flat, stay in B&B or a cheap hotel.
Keep no utility bills
Use no german bank account.
Don't own or use German mobile phone.

Trick is that you should be invisible and unreachable.

Also make sure you use a UK based agent. Because German agents are very loose lipped when it comes to dealing with authorities. they will sell you off immediately.

And more important, don't stretch your changes: never stay more than 1 year for sure or 180 days physical presence. Don't take unnecessary risk, nowadays it's very dangerous territory here in Germany, so better leave quietly after 6 months.

You can always come next year. German tax year is from Jan to Dec. You can come from April to October, then leave for Christmas and try again next year.

[OwlHoot]

Key rules:
Dont have your company income paid into an account in the county you are working in.

Dont have a tax residence in the country you are working in.

Dont buy financial products from a salesman.

Dont answer any questions unless you have to.

Take a break a bit less than every 3 months.

PZZ

Don't reply to an email whose subject starts "FROM THE DESK OF .."

[bandit_legs]

In the last years, I have been following some threads here about working as a contractor in Germany, and the problems that the German tax office, the "Finanzamt", loves to create to foreign workers. I have myself worked as a contractor in Germany for many years, and would like to warn all other foreign contractors about the "witch-hunting", ruthless behaviour, and illegal actions, according to international laws and human rights, that the Finanzamt are more than willing to apply on foreign workers - and also on their own people.

During my time in Germany, I was using a well-kown and respected non-German umbrella company/management agency that had contractors working there for several years. There was never any problems at all until one day, when the Finanzamt suddenly decided that the agency "was based in Germany", which is not true, and that it was liable to pay back the VAT to Germany for all the contractors that it employed. The agency got hold of some good lawyers that have proved that the Finanzamt was wrong. The Finanzamt, being frustrated because they could not get the VAT "back" from the foreign agency, went after the contractors, including me. In this case, I am convinced that the agency and its lawyers got it right and that the Finanzamt got it wrong. The problem is that the Finanzamt is not willing to accept the fact that they are wrong. In the socialistic Germany, it does not matter if you are right. Apparently, only the government agencies, like the Finanzamt, are *always* right because they make their own laws, ignore international laws, and you are a nobody within their country borders. Reason: The socialistic regime in Germany uses the Finanzamt heavily as their milking cow. No matter how, they are desperate to suck as much money as they can, legally or illegally, to feed their regime, and to pay for their astronomically costly bureaucracies, like the Finanzamt.

I know about one contractor who worked for a long time in Germany, and was about to start on a new contract there. He was also one of the unfortunate ones that did receive a letter from the Finanzamt asking for the VAT for all the previous years that he worked there under the mentioned agency. One day, the Finanzamt froze his bank account, without giving any reason whatsoever. He did not even receive a bill or a warning about having to pay back the VAT. It came just suddenly and unexpected. A few days later, his account was emptied by the Finanzamt. They just confiscated the funds in his personal bank account, still without sending him any bills or payment orders. And yes, there was nothing wrong about the funds in his bank account as it was salary and savings paid legally in Germany. Understandably enough, he decided to cancel the new work contract in Germany, and is avoiding any contract jobs there.

I know many contractors who have worked in Germany, and also other people who live there, and the stories that I have heard about the Finanzamt are true and very scary. Many of the tactics used by the Finanzamt are immoral, and most likely illegal in civilised countries. I know about two cases of people who live in Germany, are not wealthy, and struggling with their finances. Still, because they owed some €400, the Finanzamt froze their bank accounts and confiscated anything left in the accounts, making their lives even more miserable. In a civilised country, no government will freeze your bank account unless you are a *major* criminal. The way the German government behaves is uncivilised, ruthless, and immoral. Unfortunately, the German government has not changed much in their behaviour from the Nazi days or from the Stasi days. Germany IS a police state, and I could write a long list of what I know about Germany that makes it this Nazi-Stasi police state.

For all the contractors out there: Think twice before going to Germany.

-MonaLizzard-

bloody hell!

sounds like the nazis are back in business!

[OwlHoot]

... Don't rent a flat, stay in B&B or a cheap hotel.
Keep no utility bills
Use no german bank account.
Don't own or use German mobile phone.

Trick is that you should be invisible and unreachable.

Also make sure you use a UK based agent. Because German agents are very loose lipped when it comes to dealing with authorities. they will sell you off immediately.

And more important, don't stretch your changes: never stay more than 1 year for sure or 180 days physical presence. Don't take unnecessary risk, nowadays it's very dangerous territory here in Germany, so better leave quietly after 6 months. ...

Flip me, sounds like an allied secret agent's training prior to being parachuted into Germany during WW2

[threaded]

Flip me, sounds like an allied secret agent's training prior to being parachuted into Germany during WW2

Ah I think there was a little more to the training at Camp X:

Don't go into a beer keller and ask for a "Pink Gin".

Refrain from phrases such as "Tally ho".

And 'Security' isn't a dirty word, 'Crevice' is a dirty word, but 'Security' isn't.

[OwlHoot]

Ah I think there was a little more to the training at Camp X:

Don't go into a beer keller and ask for a "Pink Gin".

Refrain from phrases such as "Tally ho".

And 'Security' isn't a dirty word, 'Crevice' is a dirty word, but 'Security' isn't.

and when you're stepping onto a train, and the Gestapo agent standing behind you says "Good luck", don't turn round and say "Thanks!"

[Sysman]

and when you're stepping onto a train, and the Gestapo agent standing behind you says "Good luck", don't turn round and say "Thanks!"

And remember not to look the wrong way before crossing a street.

[threaded]

And remember not to look the wrong way before crossing a street.

If you need transport, and feel the need to steal a motorbike, make it a TT Special 650 Triumph and ride cross-country, their BMW boxers can't keep up and their frames can't take the punishment.