Reply to: Brit, but Working in Germany... ??

[BlasterBates]

i asked my accountant that very same question, his reply was "183 days in a jan - dec german tax year and your classed as resident, if you work 182 and then the next year 182 then your not resident"

.. again IANAA, if your worried, give a real german accountant a quick call

Ther Germans classify you as resident if you stay longer than 6 months regardless of whether the tax year ends in the midlle of it.

In German the wording is "zusammenhängend", so if you are 182 days in one tax year and then 2 days in the next you'll be expected to pay tax.

Also beware, if you are billing in Germany I believe you may well be expected to pay some tax in Germany, VAT and 25% business tax, which is independent of 183 days, which is for employment income.

[chef]

er...I'm not sure that makes sense as a question. What exactly are you asking because it sounds like you just asked is 3 days = 3 days (and nothing further).

There's something I'd like to check on which I haven't been able to get a clear answer to yet.

Hypothetically 182 days in one year and 182 in the next so that during a 12 month period well over 183 days accrued but no more than 182 in a calender yr.

Would that mean German tax for 364 days?

Looks like because of April to April being the UK tax year that things get a bit more complicated too.

i asked my accountant that very same question, his reply was "183 days in a jan - dec german tax year and your classed as resident, if you work 182 and then the next year 182 then your not resident"

.. again IANAA, if your worried, give a real german accountant a quick call

[Olly]

so if you homeworked for 2 days, and spent 3 days in Germany, its still only classed as 3 days?

er...I'm not sure that makes sense as a question. What exactly are you asking because it sounds like you just asked is 3 days = 3 days (and nothing further).

There's something I'd like to check on which I haven't been able to get a clear answer to yet.

Hypothetically 182 days in one year and 182 in the next so that during a 12 month period well over 183 days accrued but no more than 182 in a calender yr.

Would that mean German tax for 364 days?

Looks like because of April to April being the UK tax year that things get a bit more complicated too.

[chef]

so if you homeworked for 2 days, and spent 3 days in Germany, its still only classed as 3 days?

it's the number of days within the borders of germany that they are looking at as to whether you are classified as resident, if 183 days or more in a January to December period then you fill a tax return on worldwide income and pay tax on it less any taxes paid in other countries that Germany has a dual taxation agreement with.

if your working from home and that home is based in germany then it woul be 5 days, if your working from home and home is london then it would be 3 days assuming you fly in and out on day 1 and 3 respectively.

If you spend 182 days here every year for the next 20 years then you will not be liable to complete a tax return as you are not resident here. I believe, however, I Am Not An Accountant..

[poppy01]

Yes, I guess they're happy to waive the preciseness in a situation like this.

Does seem a bit cheeky that someone can spend LESS than 3 days in a country but be counted as spending 4 whole days there.

Still, it's no big deal on these short contracts. My friend can still do at least 9 months without even thinking about registering.

so if you homeworked for 2 days, and spent 3 days in Germany, its still only classed as 3 days?

[dang65]

It is calculated in days:

departure date - arrival date = days spent in germany

not hours.. zee germans are precise but not that precise.

Yes, I guess they're happy to waive the preciseness in a situation like this.

Does seem a bit cheeky that someone can spend LESS than 3 days in a country but be counted as spending 4 whole days there.

Still, it's no big deal on these short contracts. My friend can still do at least 9 months without even thinking about registering.

[chef]

yes, it is 4 days spent in Germany per week.

the registration form (required to gain a tax number which is required to complete a tax return) simply asks arrival date into country.

If ever it were checked there will be a form with a box saying date(s) of entry into the country and if required proof (you flight ticket says sunday so sunday it is) and then the same for departure (again flight ticket says weds so weds it is).

It is calculated in days:

departure date - arrival date = days spent in germany

not hours.. zee germans are precise but not that precise.

[dang65]

ok very simple for all:

a) how many days have you spent within the borders of Germany including the day you arrived and the day you left?

Sorry, I realise you've made this very simple, but can you clear up one point:

My friend's inbound flight lands in Germany at 22:00 on Sunday night.

His outbound flight takes off from Germany at 20:00 on Wednesday evening.

So, that's not even three x 24hrs. But are you saying it actually counts as four full days?

I mean, this is pretty much irrelevant anyway, as he's not likely to exceed 183 days on this contract even if the above travel routine counts as four days in Germany, but I'm curious about how it works.

[chef]

ok very simple for all:

a) how many days have you spent within the borders of Germany including the day you arrived and the day you left?
b) if a => 183 days then you are classed as residing in Germany as you spend over 6 months in the country, the same as russain oligarch's are classed as residing in the uk if they spend more than 183 days here, the same as the rolling stones cancelled a gig one year as that would mean they too were classed as living in the uk.. its not about the number of days worked, its about the number of days spent within the borders
c) if you are classed as a resident of germany you required to register the address(es) you live in Germany and pay tax on any worldwide income you have
d) if you already pay or have paid tax on any part of your worldwide income in another country you still have to complete a german tax return and in it you should detail what taxes you have paid and where you paid them along with proof
e) if you are an employer of a company who's employees work within the german borders you are also required to abide by german corporate laws which an accountant will be able to inform you of.

[dang65]

Hypothetically, if someone I knew was to work three days each week in Germany and have four days at home (two working, two weekend), flying out on Sunday evening and flying back on Wednesday evening and staying in hotels when in Germany... would he be liable for German tax?

I've never seen genuine clarification of how this would count from a taxman point of view.

Could he keep doing this every single week of the year, for years on end, and still never have any issue with German tax because 3 days x 52 weeks = 156 days. Or would he be caught because 4 days x 52 weeks = 208 days (i.e. including the Sunday flight day).

Or does he get caught anyway because he's working for a German company and his contract exceeds 183 days in total, whether he's physically in Germany or not?

[Moff]

One thing to consider is that in your circumstances, especially if you've not registered in Germany or have other "pointers" there like a bank account then will anyone ever know you were in Germany for >183 days. A small pointer may be no VAT charged.

As I am Uk LTD company, billing a UK LTD company, I am charging VAT, is this wrong ?

[Olly]

..

[Moff]

Thank you for the info chef

I bill to a Uk company, and I get paid in GBP, I just happen to be out in Germany.. does this make a difference ?

[chef]

simple,

if you spend more than 183 days or more actually in the country (irrelevant of whether your on business or for personal reasons) within 1 german financial year (jan - dec) then you are deemed as you live in germany, along with this comes various things such as you must fill in a tax return on worldwide income etc etc. and your officially stuck within the red tape of the German tax system, best advise I can give you is speak with a german accountant who can advise for your personal situation what is best.

Most people find that if they are working in Germany and spending more than 183 days within the country then the best route (i.e the least headache in resolving dual taxation laws and ensuring both uk HMRC and the german Finanzment [] are kept happy) is to register as Freelance within Germany and completely ignore/bypass any uk ltd they have.

However, I am not an accountant and this is only true of 90% of the uk contractors i know working out here, it may not apply to you, for the bargain price of £150 or thereabouts, seek out an english speaking german accountant and have an hr's chat.

German tax authority have a lot more powers than HMRC and "i didnt know" is not an allowable excuse if they come knocking on your door early morning or send you a letter anytime in the following years.

German tax is paid quarterly in advance based on expected earnings.

Other factors include are you working direct for the german company? if so you may be liable in various other fee's / rules as an company employee of your ltd company.

Another factor may be the amount you earn and that you may be liable to pay German VAT.. something you might want to check out quickly as VAT payments are made monthly with penalties for none registration and late payment..

speak with an accountant, it'll be the best sleep avoidance solution you'll ever spend your money on.

Chef

p.s I can highly recommend Thomas Zitzelsberger of Expat Tax http://www.expattax.de , works remotely via email, speaks excellent English and comes highly recommended from http://www.toytowngermany.com (a very useful ex pat site for germany)

p.p.s my invoice for providing this very useful information that i managed to search for and find myself is in the post ;-)

[Moff]

Could I have a little help please

I couldn't find anything by searching for 'German Taxman'