working as a freelancer in Germany

[dang65]

if it's a UK agency you work for...then one of us is wrong!

There's a very good chance it's me that's wrong. It is a UK agency and German client. I asked the agency and they said to add VAT to the invoice. It's just that I don't really get why that would be wrong, but I'm a financial retard. Can someone explain it to me?

[Olly]

How does the VAT thing work? I'm on a contract in Germany at the moment and my accountant originally mentioned this to me, but when I asked the agency about it they told me to put VAT on the invoice to them. I did that for the first month. Have I made a big mistake there?

if it's a UK agency you work for...then one of us is wrong!

[chef]

aren't you working for a UK based agency though?
in which case you don't charge that agency VAT when you invoice

i thought that but then i found this on the hmrc website

http://www.hmrc.gov.uk/vat/int-serv-abroad.htm

"However, with services, deciding the place of supply is more complicated. There are various rules that apply, depending on whether you have more than one business location, the kind of service you provide and the place where your business is legally registered.

The place of supply is important, because it determines where VAT is charged and paid.

If you are in the UK and the place of supply is in the UK, you charge and account for VAT according to UK VAT rules.

If you are in the UK and the place of supply is in another EU country, you can zero rate the supply if the customer is a business. However, you must charge and account for UK VAT if the customer is not a business, and you may need to register for VAT in the country of supply."

I am uk registered, I supply my services in the EU to a business, I dont earn enough for german vat threshold and i am below the 183 day limit.. so as i understand it I dont charge VAT for my invoices and i dont pay VAT in germany as im below threshold..

I will check it out with my accountant though..

[dang65]

aren't you working for a UK based agency though?
in which case you don't charge that agency VAT when you invoice

How does the VAT thing work? I'm on a contract in Germany at the moment and my accountant originally mentioned this to me, but when I asked the agency about it they told me to put VAT on the invoice to them. I did that for the first month. Have I made a big mistake there?

[Olly]

aren't you working for a UK based agency though?
in which case you don't charge that agency VAT when you invoice

[chef]

I was under the impression that as im working for 60 working days, i'm in the country for 3 months minus weekends and I definately dont earn enough in that period to hit VAT levels all should be ok, i will ask my accountant

[YHB]

also make sure you are aware you will not be unlikely to be tax free as will need to pay in UK as per ir20

[The Albany Group]

I would say yes. Plenty will take a the risk (and its a very real one) that a short term contract permits this approach. 2 things in response; firstly, two weeks rather than two months might be a better yardstick, secondly what happens when the contract extends (e.g. clients asks for another month, then another and before you know it, etc etc). Dont forget so long as the registration application is made you have covered your obligations.

[BlasterBates]

Chef I would really go and see a German accountant. They stamp on VAT fraud very hard, you will face prosecution if you don't pay when you should.

[chef]

Some general pointers. As Germany is one of the most vigilant tax authorities in Europe it is imperative that you declare all income in the country. It is possible to work employed or self employed ("freiberuffler"). If you take the former option, your employer must have an AUG (labour leasing) licence which pretty much rules out using your own UK registered Ltd company. The self employed route is quite popular - tax is payable from the outset on a quarterly basis and based on a projected annual earnings. 2 significant things to remember are that a freelancer in Germany (or his spouse) needs to be degree qualified and a residential address is required (as opposed to simply having a hotel). Feel free contact us directly if we can be of further assistance.

even for a short term (60 working day) contract where the total earned is below vat declaration levels?

[The Albany Group]

Some general pointers. As Germany is one of the most vigilant tax authorities in Europe it is imperative that you declare all income in the country. It is possible to work employed or self employed ("freiberuffler"). If you take the former option, your employer must have an AUG (labour leasing) licence which pretty much rules out using your own UK registered Ltd company. The self employed route is quite popular - tax is payable from the outset on a quarterly basis and based on a projected annual earnings. 2 significant things to remember are that a freelancer in Germany (or his spouse) needs to be degree qualified and a residential address is required (as opposed to simply having a hotel). Feel free contact us directly if we can be of further assistance.

[mailric]

Has anyone got a link to a one-stop-guide to operating as a freelancer in germany ?

is it similar to being a sole trader over here ?

Not personally, but the Brits have definately infiltrated germany's borders in the past

[AlfredJPruffock]

Has anyone got a link to a one-stop-guide to operating as a freelancer in germany ?

is it similar to being a sole trader over here ?

Unlike the UK , soul trading is not permitted in Germany, unless the contract with respect to the German blood laws was signed in blood.

[jkoder]

Has anyone got a link to a one-stop-guide to operating as a freelancer in germany ?

is it similar to being a sole trader over here ?

Did you check these out?

http://www.contractoruk.com/overseas_guides/004007.html

http://www.contractoruk.com/overseas_guides/004006.html

[SteveV]

Has anyone got a link to a one-stop-guide to operating as a freelancer in germany ?

is it similar to being a sole trader over here ?