Reply to: . . Germany - the taxman cometh

[PaulWhite]

More Info

Systematic pillage of legal limited companies by the German and Norwegian authorities.

I am going to keep it short. Most people with complaints here seem to automatically given in to the authorities denying their rights as owners of small limited companies to have their tax issues dealt with in a fair manner by the authority to which they truly belong and that is HMRC.

If you go to the trouble of following up on the legal basis of corporations operating in foreign areas within the EU you will find that as long as you keep your records up to date in the UK, prepare your returns in the United Kingdom, have a functioning office there then every major EU ruling would support you.

Living either in Germany or in Norway is not the most relevant fact.

Having now gone through many reports on these forums I have come to believe that both of these governments, or at least their fiscal authorities, are purposely bullying small entities into agreeing, or rather giving up appealing, that they are solely liable for tax in their areas.

I can personally report that there have been severe attempts towards me and my company almost forcing a collapse based on their, partially criminal, accusations and decisions.

The system I believe works in Germany as follows. Whether it is exactly the same in Norway would need to be proven by other readers.

First the Finanzamt accuse you of running a scam company and send, possibly ridiculously high, tax estimates.

They know that you are basically forced to appeal via their very own system. There will probably never be any suggestion that contact is made with HMRC as one would expect where two countries have a dual tax agreement. In fact any suggestion of making contact will be ignored. Not rejected, not mentioned. Nothing.

Your appeal, if you dare, will be rebuffed with standard German laws which actually say nothing other than you will be taxed where your company is run from. Any suggestion by you that this is actually the UK will be either ignored or you will be told it is not significant because they believe you are running your business from their territory.

So your appeal will be rejected with the statement that you can appeal at the nearest (expensive) Financial Court.

Financial courts start getting expensive. So if you have not been in the country too long or your profits were not enough to warrant the fight you will probably give up. I found that even contesting one year cost me about four thousand Euros up front.

Financial Courts in Germany, even though they will claim otherwise, are about as impartial as a man you have just kicked in the teeth. Ask any German lawyer and you will be told: steer clear of the financial courts.

I was laughed at, really out loud, when I asked the judge in our case whether International Agreements or EU laws applied to my companies structure. His answer: I don't care about international laws or the Eu Rulings, I do what the FH [Finanzhof] tell me. And then he laughed out loud and turned to his gallery of co-judges.

So your next chance if you lose in the Financial Courts is to appeal to the next higher level which I believe gets truly expensive.

[cojak]

I think that if you've asked the first time and got no response, you'll not get (sensible) advice if you ask for a second time in General.

As Fred Bloggs said, it will be better if you place this request in an expats forum for Germany/Switzerland.

Try here: https://www.englishforum.ch/forum.php They have Germany and Switzerland forums.

[cojak]

Hi

I’m finding myself in dispute with the German tax authorities after a few years contracting in Germany.

The situation is quite a mess as it involves taxation in both Germany and Switzerland. I’m a bit lost as I don’t fully understand relevant laws and so I need to find somebody who really understands these things and who can explain to me clearly what my options are and maybe represent me to the Tax Office there.

Does anybody have any recommendations for people that they have used for this or for similar situations in Germany?

Thanks in advance

And moved again..

[Fred Bloggs]

Hi

I’m finding myself in dispute with the German tax authorities after a few years contracting in Germany.

The situation is quite a mess as it involves taxation in both Germany and Switzerland. I’m a bit lost as I don’t fully understand relevant laws and so I need to find somebody who really understands these things and who can explain to me clearly what my options are and maybe represent me to the Tax Office there.

Does anybody have any recommendations for people that they have used for this or for similar situations in Germany?

Thanks in advance

I think you need to ask this in Germany and Switzerland eh?

[Fred Bloggs]

I know the thread is yonks old, but what a five star world class rant it was kicking the thread off. We don't get quality ranting like that any more. Could be because of Brexit, I guess?

[waterflow]

Seeking a Swiss-German cross border lawyer

Hi

I’m finding myself in dispute with the German tax authorities after a few years contracting in Germany.

The situation is quite a mess as it involves taxation in both Germany and Switzerland. I’m a bit lost as I don’t fully understand relevant laws and so I need to find somebody who really understands these things and who can explain to me clearly what my options are and maybe represent me to the Tax Office there.

Does anybody have any recommendations for people that they have used for this or for similar situations in Germany?

Thanks in advance

[cojak]

Moved this post into the best thread for this kind of thing.

[waterflow]

Help needed: Suggestion for good cross-border legal specialists in Germany

Hi

I’m finding myself in dispute with the German tax authorities after a few years contracting in Germany.

The situation is quite a mess as it involves taxation in both Germany and Switzerland. I’m a bit lost as I don’t fully understand relevant laws and so I need to find somebody who really understands these things and who can explain to me clearly what my options are and maybe represent me to the Tax Office there.

Does anybody have any recommendations for people that they have used for this or for similar situations in Germany?

Thanks in advance
waterflow

[PaulWhite]

Criminal Record

I need some help. Myself along with many others all got royally screwed by the finanzamt due to the negligence of a UK accountant.
I am looking for anybody with any original documentation ideally signed by MM (The accountant in question)
A number of us started a complaint with the insititute of chartered accountants - and all of us only have photocopies - which is not enough to take action against him.
The accountant in question is now claiming he had nothing to do with the scheme - had no part in it - and was not responsible for those of us who took his advice and ended up with criminal records in Germany.
Any help would be appreciated - you wont get any money back - but you might sleep better knowing the person who caused you so much trouble would not be able to do this to anybody else in the future.
Anybody else wanting to lodge a complaint can do so at the address below :
https://www.icaew.com/en/about-icaew...ke-a-complaint

What was the reason for the criminal charge?

In my opinion the Finanzamt is actually using a nasty scam. I have just received a letter from the German State Attorney, I put in a request for the head of the tax evasion office at the Finanzamt Bayreuth to be prosecuted for various reasons including the fact that he had made no attempt to contact HMRC to check on my version. The letter states absolutely clearly that the Germans's are in no way obliged to follow up or take any action based on or using the dual tax agreement with the UK. If so I believe the foreign office should give notice. As I have often read. Germans believe Treaties are optional.

-Paul-

[stayaway]

Anybody got any original documentation from PSB???

I need some help. Myself along with many others all got royally screwed by the finanzamt due to the negligence of a UK accountant.
I am looking for anybody with any original documentation ideally signed by MM (The accountant in question)
A number of us started a complaint with the insititute of chartered accountants - and all of us only have photocopies - which is not enough to take action against him.
The accountant in question is now claiming he had nothing to do with the scheme - had no part in it - and was not responsible for those of us who took his advice and ended up with criminal records in Germany.
Any help would be appreciated - you wont get any money back - but you might sleep better knowing the person who caused you so much trouble would not be able to do this to anybody else in the future.
Anybody else wanting to lodge a complaint can do so at the address below :
https://www.icaew.com/en/about-icaew...ke-a-complaint

[PaulWhite]

German Corruption, persecution and refusal to adhere to diplomatic rules

This is also my attempt, like many others here to shed some light on the way the Germans work and maybe give a little advice. However I also still need advice myself and welcome direct contact with anybody who also feels they have been persecuted by the Germans.

I am preparing an open letter to the Foreign office, although I am not sure if it is really in their department, requesting that the dual tax agreement with Germany is reviewed based on the fact that, in my case certainly, the German authorities are avoiding using its rulings. In fact it is a complete waste of time.

I will be posting much more information in the near future and am also preparing a social media campaign and will be publishing a new web-site detailing all the corruption and bullying I have encountered.

Basically my story is:

- Lived in Germany
- founded a limited company in 1983
- I am the dBase Distributor for most of northern Europe and this was registered (Gewerbeanmeldung) and correctly taxed in Germany up through 2012.
- The British Ltd. company was used for my contract and software side of the business.
- Was prosecuted in 2001 on the grounds the company had been set up only as a tax avoidance scheme and second that my payments from the company were not being correctly declared in Germany. The claim of a scam company was dismissed within minutes and the other subject was dismissed after 2 days.
- House was searched in 2012 ion the grounds that no returns had been made either in UK or Germany. This was almost immediately revised to say we had not paid tax but made no returns in Germany. Again claiming that the Ltd. was an entirely german corporation.
- Our complaint that the case about the company status had already been settled in 2001 was refuted and they Finanzamt claimed that there were no case files any more.
- A call to the Court revealed that only a few weeks before the case files had been destroyed because this is the case in Germany if you win. I could no longer find my copy of the court files. I hadn’t realised that they had been confiscated along with 90 other folders and binders when the house was searched.
- Long story short the Finanzamt just ignored every attempt to get them to trade information with HMRC concerning the status of the Ltd. Company. Their evidence that the company had allegedly made no returns showing significant income were derived from some in-official web-site system called “Dellam” who sell of company info that is available from Companies house anyway.
- After 4 years I was told by my German lawyer that there was no chance of winning and that the court / judge had told him that only a complete confession would save me from prison without a suspended sentence. So put bluntly “coercion pure”. In fact at this stage we had not even put in our plea. All the court had was the state attorneys / Finanzamt version of the story.
- So being stupid I gave in and was sentenced to 1 year and 6 months suspended.
- But now the curious part: The judge at first stated it would no longer be necessary to interview witnesses but suddenly changed her mind and requested that the head of the Bayreuth Finanzamt investigation department come forward for questioning. She only had one question and it would seem to me now that she knew what was coming. She repeatedly asked where the information in the case file had come from. The man (Michael Franz) tried several times to avoid answering. But she was relentless and at last the answer came:
- We got the information from “google”
- Even though I have been sentenced I had applied to the State prosecutors in Berlin (I had been warned to avoid anywhere near the Bayreuth are) for prosecution on the grounds that Michael Franz had conjured up evidence.
- At the time of writing he is being investigated for Fraud.

Added to all this is the problem, that even though I have now left Germany, losing my family, the Finanzamt are constantly harassing me with new demands as though I am still there. As it happens I stopped doing any work in Germany immediately after the search. I still officially lived there until 2014 but any sales were made by a business set up by my wife. This on the advice of German tax consultants.

The reason for this harassment is clear and I hope serves as a warning to others who may end up in the same predicament.

The German authorities are trying to recover personal income tax resulting from the company’s profits they claim we owe them via MARD.

As yet they have not attempted to recover the corporation tax or any other company related taxes. I think they know that this would automatically involve HMRC who basically cannot refuse to recognise the correct status of the company.

So now they are trying to impose a German ruling which says if a company owned by a sole director does not pay tax due then the sole director is liable in entirety. This of course only works as long as they keep insisting the company exists and is de facto in Germany. They have also tried via my German lawyer to persuade (harass) me to into closing down the company. Also as to the repeated tax demands I am always told just to make a zero return. I fact they have now reduced their estimates to zero for a couple of years but still insist I make a tax return for the company.

They can wait until I have finished with my death bed.

Germany has still not learned that treaties, such as the dual tax agreement, are not optional. Neither do they seem to realise that England is not Sudetenland over whom they can preside as they see fit.

What I have started to do is now request prosecution of individual tax agents based on harassment etc. The german’s cannot ignore such requests, beat them with their own laws, but are constantly referring each indictment to the local authorities in the area of Bayreuth. Again I am complaining every time at a higher level.

Maybe one day to the ECtHR.

Sorry this is a bit long, but I welcome comments and would like to speak to others and exchange tips and information. In particular if anyone has found a German lawyer who is really prepared to fight this sort of situation. My experience in the last years was that they don’t want to get into trouble with the authorities in their area and play the whole business down. Money for doing SFA.

[SRJ]

My Turn

Hi All,

I'm currently going through the same issue mentioned on this thread.
I received letters and responded to them denyong their claims.
The tax authorities only have one invoice showing an amount that was paid to the UK agency that employed me, from the German source.
Based on this I went to a criminal court already where I was found not guilty within 10 mins. The tax authorities and pitifully thin evidence and fabricated it where it didn't exist, which I was able to prove with undisputible facts.
However, the tax authorities have still decided to persue me for tax relating to an "assumed" 250,000 euros over a two year period (even though it was actually only 18 months).
According to my German tax lawyer (Mr. J. H), the case will go before the civil tax court next week and I will certainly lose.
I very dissapointed and quite distraught about this as previously, my german tax lawyer had always told me that I had nothing to worry about and I was completely safe and I would certainly win adn in the strongest position....... bla..bla....

Anyway, Im now seeking ay advice on what I should do:

1) with respect to my legal representation? Do I stick with my German lawyer who appears to be a bit of a let down.... or do I change to someone else? or is it too late? ... Any recomendations are welcome.

2) What to do to protect my assets and try to secure some kind of finacial future for my wife and children who weren't even part of my life when this occured 12 years ago:
- I currently live in France and own property there (our home) together with my wife
- I have a house in the UK which is rented out with the deeds and a mortgage account in my name
- I have a vehicle which is registered in the UK

Any advice would be really appreciated.

Still can't belive this is happening.

- only 18 months in country
- I was a junior contractor back then and it was my first contract abroad
- there is no "actual" evidence against me - they are just making assumptions
- I won the criminal case hands down
- now they're looking for an amount which could be between 200 to 250 thousand euros to settle the demands of their assumptions

[hlvs001]

Note: everyone is talking about dealings with German Tax man... NOT the Dutch or Spanish tax man... Only way is to fight German Tax man - No other option. A Clement Attlee type appeasement only makes the monster bigger & more dangerous.

As a project manager for firms in Austria & Netherlands I have come across over 2 dozen German contractors working as German Freelancers & one woman who still works in in Austria has done so through a company in the south of Munich since 2009 & not even registered in Germany... yet her freelance wages are all done in Germany... now try that with a UK Ltd company & you can be sure what the German tax man will be after.

It is a shame so many have caved in so easily... any German accountant or lawyer would only act for & on behalf of the German state... The honourable thing to do would be to point out how they have violated the Lisbon treaty etc. I am trying hard in fighting them & if you are willing then join me.. the more the better. We trying to get to the ECJ through a direct method & have a brilliant German educated English barrister based in Canary Wharf ......... the normal route through a German lawyer & German courts to ECHR is not available because.. well no German likes to challenge the state... Deutschland über alles & all that..

what they refuse to realise is that this covering for the state is what gave them the biggest monster in Human History the NAZI's (ooops one should not say that word... better say National Socialist) followed by the Satzi... & now it would seem in Finazis..,. but I guess there is no getting through to some people.... or like the Internet Cafe owner in Soldiers Point in NSW told me as he came up to me & asked what I thought of the Germans .. before I had a chance to reply he said "mean & greedy people"....... hard words to swallow given my wife is German... but so very true!

In my case, the German tax authorities has the invoices from the UK based employment agency to the source company in Germany for their consultancy agreement on behalf of me.
I have declared and paid German taxes for the amount received into my bank account and as per contact between me and the UK based agency.

The German tax authorities are imposing tax liabilities (principle + interests + penalties) on me for the remaining balance pocketed by the UK based employment agency. As per current German income tax laws, this is allowed. Hence they are allowed to enforce the tax debt through the EU Mutual Assistance Regime, and the requested authority has no right to clarify the validity of the tax debt. It's only the applicant authority German is allowed to accept any disputes of the claim. Trust me it's not easy to deal with the German tax authorities.

Take a look at the recent bankruptcy case in the UK for a German tax debt
Bankruptcy orders and the mutual assistance regime—Revenue and Customs Commissioners v Smart


Take a look below from a German legal representative;

Previous decisions in similar cases:
The tax authorities or civil courts decision follows almost invariably the tax jurisdiction in similar cases. In our estimation, which specialises in the assessment of tax law in fiscal court litigation, the relevant current case law of the tax courts tends in the direction, to attribute the payments of principals (in this case the source company Germany) to employment agencies abroad completely to the contractor (you) in matters of income tax law.

This approach of the courts is legally vulnerable, but unfortunately it corresponds to the previous practice of the tax courts. Since the civil jurisdiction - as explained above - depends primarily on the recent decisions of the tax courts - are the chances of success in your case, therefore, low the moment. This would be different if a leading decision of the Supreme Fiscal Court (Bundesfinanzgerichtshof) would change this previous judgement practice. Such a decision has not yet been issued and is still pending.

[happyradio]

stand up & fight

Note: everyone is talking about dealings with German Tax man... NOT the Dutch or Spanish tax man... Only way is to fight German Tax man - No other option. A Clement Attlee type appeasement only makes the monster bigger & more dangerous.

As a project manager for firms in Austria & Netherlands I have come across over 2 dozen German contractors working as German Freelancers & one woman who still works in in Austria has done so through a company in the south of Munich since 2009 & not even registered in Germany... yet her freelance wages are all done in Germany... now try that with a UK Ltd company & you can be sure what the German tax man will be after.

It is a shame so many have caved in so easily... any German accountant or lawyer would only act for & on behalf of the German state... The honourable thing to do would be to point out how they have violated the Lisbon treaty etc. I am trying hard in fighting them & if you are willing then join me.. the more the better. We trying to get to the ECJ through a direct method & have a brilliant German educated English barrister based in Canary Wharf ......... the normal route through a German lawyer & German courts to ECHR is not available because.. well no German likes to challenge the state... Deutschland über alles & all that..

what they refuse to realise is that this covering for the state is what gave them the biggest monster in Human History the NAZI's (ooops one should not say that word... better say National Socialist) followed by the Satzi... & now it would seem in Finazis..,. but I guess there is no getting through to some people.... or like the Internet Cafe owner in Soldiers Point in NSW told me as he came up to me & asked what I thought of the Germans .. before I had a chance to reply he said "mean & greedy people"....... hard words to swallow given my wife is German... but so very true!

[EXPATTAX]

I have been offered a contract by a non German entity which is not in any way registered in Germany. They want to set up and office and employ local staff in Bavaria of all places. I have decided to register myself as a freelancer/contractor (awaiting final legal advice on this) to keep myself out of trouble.

What is going to happen to the non German entity if the tax authorities find out and raid the office? I expect their local workers will be hired as ''consultants" and none of the usual rules followed. From what I have read being outside Germany is no protection to being pursued for a tax liabilty, does the same apply for fines, can they be fined for Schwarzarbeit and the fine enforced if they do a runner from Germany?

Hi blagtrip,

I wonder did you take the contract and how are things developing?

You were asking about the enforcement of taxes and penalties. As long as you are within the EU both will be enforced. So indeed being outside of the country is no protection. Outside of the EU it gets obviously a bit more difficult for the German authorities to enforce their claims. You could say that it gets increasingly difficult for them the further away you are.