Reply to: German Tax Raid

[BlasterBates]

I know I'd have to be made redundant .. which I intenend to make happen.. not hard if you think about it... there is no max limit of 1700 euros actualy for unemployment benefit - absolutely sure of that.

unless you´ve got kids, you can check here.

Arbeitslosengeld 1 Rechner Arbeitslosengeldrechner 2012 ALG 1 I maximal

[happyradio]

I know I'd have to be made redundant .. which I intenend to make happen.. not hard if you think about it... there is no max limit of 1700 euros actualy for unemployment benefit - absolutely sure of that. I know someone who lost their job & got them to pay for project manager training & one to one german lessons & now works in Stuttgart as a project manager.. basically from day one he told them that he cannot hold a job down as an engineer because younger kids were much faster than he could ever be & so they gave him all that training & my wife's BIL was sent to Kent for 2 weeks to learn English as he told them that it would help him find a job. There is something noble in screwing those that screw you!

[darmstadt]

80% up to half the time you contributed after which it drops to 67% if you have a child & if you are over 42 then there is no end limit. I think I will work 12 months & then take 6 month off & get some extra training in project management, accounting maybe even do an MBA in parts..

No you won't unless you've been made redundant. You don't get any Arbeitslosengeld if your contract comes to an end and you have to have been paying Arbeitslosengeld in the first place (I don't.) You also won't get any re-training until after a certain period of time and it won't be exactly what you want but what they offer you.

[BlasterBates]

Max is EUR 1700 a month, paid up to a maximum of 12 months. Still ok though. After that you get nought until you´ve used up your savings. If you´re 55 they´ll pay up to 18 months.

[happyradio]

unemployment money

80% up to half the time you contributed after which it drops to 67% if you have a child & if you are over 42 then there is no end limit. I think I will work 12 months & then take 6 month off & get some extra training in project management, accounting maybe even do an MBA in parts..

[Olly]

Actually it won't happen in the UK - a lot more civilised, a lot less mean & no where near as greedy a country ... In fact I heard a collective gasp when I told the UK taxman about the German tax raid & their demands... BTW they want me to pay full taxes to them not just the dividend... & that I can collect any taxes I have already paid to the UK taxman myself.. sounds a laughable except they are deadly serious... BTW I will screw the system in return.. will work 12 months on a maximum salary , pay the social security contributions & then rock & roll it with 80% , then work 12 months & again rock & roll it.... yeah there is also free training & all sorts I'm told

80% up to a maxium of?
Can't help thinking there's a bit of karma here

[happyradio]

Actually it won't happen in the UK - a lot more civilised, a lot less mean & no where near as greedy a country ... In fact I heard a collective gasp when I told the UK taxman about the German tax raid & their demands... BTW they want me to pay full taxes to them not just the dividend... & that I can collect any taxes I have already paid to the UK taxman myself.. sounds a laughable except they are deadly serious... BTW I will screw the system in return.. will work 12 months on a maximum salary , pay the social security contributions & then rock & roll it with 80% , then work 12 months & again rock & roll it.... yeah there is also free training & all sorts I'm told

[BlasterBates]

I do know of one case, a German soldier who returned home once a month and that was deemed to be his main residence.

In your case it definitely is tricky because the main tax residence is where you both are mainly, and that could actually be the UK or Germany, i.e. she was visiting you. That is very much in your favour. In fact she could theoretically end up being deemed to be UK tax resident (I kid you not). Bit don´t worry that aint going to happen.

International tax residency is horribly complicated so just let your lawyer or accountant deal with it. The German tax authorities will be obliged to justify why you are German tax resident so you need to wait for that and whether it is worth challenging. The problem with determining international tax residency is the tax authorities don´t communicate with one another they all assume you are mainly tax resident from their point of view unless you prove otherwise.

I was assumed to be tax resident in bothe Switzerland and Germany and after a few years I realised I was paying too much tax, since I notified the Swiss authorities that my main tax residency was in German I´ve felt hounded ever since. I had to send proof for all my journeys, and if the Swiss authorities had found something like a Gym membership, I´d have been for the high jump.

[happyradio]

Chef: I think you misunderstood re de-registering & renting a flat & yes i have a lawyer & accountant... we have another meeting tomorrow morning & based on the outcome we will either decide to change to a lawyer recommended by the family or stick with him & conclude matters

BlasterBates: I spent 1 weekend per month on average & approximately 2 weeks of my holidays per year in Germany..she did the opposite in the UK/Netherlands... But I do see your point.. If I knew these people are this mental I would have submitted my tax returns every year to them as well.... I think the outcome will be like you said... they may tax my dividend & even fine me though I don't think it would be fair at all.

BTW current lawyer thinks it's a bit extream but better negotiate & settle up... accountant thinks they are bonkers & we should fight them.

[BlasterBates]

It´s complicated because you had a girlfriend in Germany. If you were visiting your girlfriend at the weekend in Germany they could argue that your main tax residency is in Germany. Basically you were in Germany you settled there got a girlfriend and then went off to work in the UK and the Netherlands but because you have "family ties" in Germany it can be deemed your main tax residence. Forget the 183 day rule that´s only part of the story. I´ve been working in Switzerland for the last 8 years but my main tax residence was Germany. I spent far less than 183 days in Germany; it´s enough to spend two weekends in Germany per month for it to be your main residency. Now that´s not to say I get taxed on my earnings from Switzerland, I haven´t been, but I declared them.

Unfortunately what you should have done was either to continue to submit tax returns or send a detailed explanation of your personal circumstances and challenge them on the fact of your tax residency, whilst you were regularly visiting Germany.

You are very lucky indeed that they haven´t challenged your 2006/2007 periods, some contractors were less so. Don´t simply assume you have nothing to worry about, they may simply not know about it.

What you need to do now is to contact a good Steuerberater. You now need to prove to them that you were working in the UK and Netherlands. Your salary I think will not be taxed again. Your dividends may be taxable in Germany, but they will take into account tax paid in the UK. You can also try to demonstrate that your main residency was the UK but if you were seeing your girlfriend twice a month in Germany that will be a tough one given that you are now not dealing with the admin bods in the office but with the flying squad and the state prosecutor.

I think you may end up owing tax but it won´t be the "full wack" having said that because it was undeclared you might be facing a fine and penalties unless you can demonstrate you weren´t tax resident.

Good luck.

[chef]

Just one other point.

If you de registered before you left Germany but continued to rent a flat there and still live there then it is a logical conclusion to think that although you didn't work in Germany that you lived in Germany (I.e cross the border onto German soil) for more than the 183 days of a year and simply commuted across the border to the Netherlands.. Or have I misunderstood that you weren't actually living in the flat that got raided when it was raided?

[chef]

Surely this is a conversation you should be having with an English speaking German solicitor?

If all the evidence points to you living outside the country and not in the flat you have rented including de registration etc. then the German taxman knows that when this comes to court they don't stand a chance and won't pursue you any further. Ranting about it on a uk it contractor forum isn't really going to help matters.

Ask your accountant for a good solicitor and speak with the people on toytown forum for advice as a much larger percentage of them live in Germany than do on this forum.

Good luck.

[happyradio]

Guys - here is a bit more details:
yes I de-registered before I left Germany

Yes I have employment, rental agreements proof of living in the UK & Netherlands

I worked in Germany in 2 stints between 2006 & 2007 within 183 day rule - Accountant inGermany guarantees this is not a problem & tax man is not challenging this aspect per se

There is ample evidence that I lived & worked outside germany in then intervening period.

There is nothing that ties me to Germany except that I dated a girl there from 2006/2007 & married her in the UK in 2010.

During this period she got me membership in a Gym which cost her Euro 15 per month. This was only cancelled in 2010 but the tax man here says that this is proof to living in Germany all along.

We have asked the tax man to find out how often the gym was frequented & then comment. He seems not willing to do that.The Gym wont supply such information to me or the lawyer or possibly dont have it.

My wife got me this membership because she thought I was getting a bit to fat but I used it less than a dozen times.

[Brussels Slumdog]

It seems that you have been living in the UK,Netherlands and Germany for the past 46 months
-Where we you actually working during this period (Source of Income)?
- Did you use a Ltd company to work in Germany?

[darmstadt]

The only way you could have rented a property in Germany would be to register at the local authorities plus open a German bank account. When you left Germany you should have deregistered and, not neccesary though, closed your bank account. If you didn't, at least deregister, then the German authorities infer that you were resident here the whole period. The onus is on you and your lawyer to prove you weren't.