Contracting in Germany - long-term

[Richard SJD Accountancy]

Hello

Here a link to the SJD website and our guide on contracting in Germany.

I hope that helps :-)

Mod note: I've pulled the URL but at least you now know that SJD has a guide. Ask your colleagues about blatant advertising in the forums Richard and what I do with transgressors...

[xara]

Yea, expat-tax is the backlogged one.

Anyway, do you think I can sort it out as I go along? Expat-tax should be fine, I will just need to wait until June at least before they can take a look at my affairs (but not due to start until May)

[BlasterBates]

Hmm...one accountant quoted me over 1000 euros per year to do all accounts (he's having a laugh...)

The other most recommended guy seems to be totally backlogged until end of May, and can't even field queries.

So: is there anything I need to have in place from day 1? Or can I just go to Germany, start earning, put some sort of approximation of the tax payable aside, and sort it out as I go along? I already have a euro bank account although it's in France.

Yes you can you won't get paid for 4 weeks and you don't need to register anything until the VAT has to be paid.

1000 EUR's per year sounds quite reasonable, he's got to do the monthly VAT and prepare a P&L. I paid 500 EUR just for my personal tax form to be filled out.

Still I would wait until you get there and ask around for a personal recommendation.

[chef]

Hmm...one accountant quoted me over 1000 euros per year to do all accounts (he's having a laugh...)

The other most recommended guy seems to be totally backlogged until end of May, and can't even field queries.

So: is there anything I need to have in place from day 1? Or can I just go to Germany, start earning, put some sort of approximation of the tax payable aside, and sort it out as I go along? I already have a euro bank account although it's in France.

who are the 2 you have tried?

Have you spoken with Expat-Tax?

[xara]

Hmm...one accountant quoted me over 1000 euros per year to do all accounts (he's having a laugh...)

The other most recommended guy seems to be totally backlogged until end of May, and can't even field queries.

So: is there anything I need to have in place from day 1? Or can I just go to Germany, start earning, put some sort of approximation of the tax payable aside, and sort it out as I go along? I already have a euro bank account although it's in France.

[BlasterBates]

I wouldn't worry about it in the short term. The fact that you never paid into the system in the first place means they won't have any knowledge about you. They basically scan through all their records to find people who used to pay in but now don't and then they send you a form; it isn't even clear if you have to fill this form out, as the purpose is simply to update their records, but it is an opportunity for them to find out whether you're self-employed, and then conduct an enquiry.

Certainly if you had online contracts this would be very helpful I would say. Though I think the unwritten rule is no more than 5/6 for one client.

Worst comes to the worst just pay EUR 500 a month, I think for the first 2 years of self-employment you are allowed a special halfrate of EUR 250.

You can employ someone, not a family member, which would need to be around EUR 500 a month maybe you can employ someone to do your online contracts.

[xara]

Thanks both...

Any idea what I'm looking at forking out for a decent accountant over there? I saw a figure of 300€/month being bandied about in another thread...

I suppose the tricky thing with the freiberufler definition is that as things stand, I am indeed going over there to work for a particular client. But I guess I can contrive to find something to do on the side so that it's not my only source of income. If I could do some online gigs (not necessarily for a German end-client) would that be sufficient?

[darmstadt]

BB is correct about going the Freiberüfler way but be careful as some positions in IT are not considered to be in that area and you will have to go the Selbständiger route which means getting a Gewerbeschein and paying Gewerbersteuer. They tried it on a friend some 25 years ago and he took the Finanzamt to court and won and then they tried it on me a couple of years back. A phone call and a copy of my CV cleared that up. For example a programmer who is given a clear set of instructions could be considered as Selbständing but a systems programmer who works to his own rules is not (the Finanzamt are trying to cut down on Freiberüfler in order to get more tax...) There are also other rules which come into play, I cannot remember them all but I believe that if you pass 3 out of 6 (such as working for more than one client, advertising, etc.) then you can be determined into what class you fall. As always, get yourself a German accountant who should advise you of these pitfalls. In fact anyone coming to work in Germany who will pay tax here should get one as the tax rules change every year for self-employed (especially for bloody driving cars...)

[BlasterBates]

Very rough but around 65% I would say.

[xara]

The most straightforward way is as a freelancer (Freiberufler). You don't pay Sozialversicherung.

Sozialversicherung is not a tax and is not dealt with by the Taxman. If you really want to stay longterm and I mean several years then it might become an issue. The public pensions dept might send you a letter asking why you're not paying in.

They have a rule very similar to IR35 which means if you work for one employer they might suspect you're a disguised employee.

But nothing to worry about in the short term, this letter would come in several years time, and they're not going to send one if you're in the UK.

Thanks for this.

Any ideas how I could figure out roughly what % I might retain out of my daily rate as a Freiberufler?

[BlasterBates]

The most straightforward way is as a freelancer (Freiberufler). You don't pay Sozialversicherung.

Sozialversicherung is not a tax and is not dealt with by the Taxman. If you really want to stay longterm and I mean several years then it might become an issue. The public pensions dept might send you a letter asking why you're not paying in.

They have a rule very similar to IR35 which means if you work for one employer they might suspect you're a disguised employee.

But nothing to worry about in the short term, this letter would come in several years time, and they're not going to send one if you're in the UK.

[scooby]

What is the most straightforward way of contracting in Germany so as not to get on the wrong end of the taxman. Contract is fairly long-term so I probably wouldn't bother going through a UK limited.

Rate is between 400 and 500 a day, anyone any ideas of what I might be taking home? Could there be substantial costs associated with making my situation legit, paying an accountant, indemnity insurance, anything like that?

Thanks.

In NLUK grumpy fashion, have you checked the sticky about 5th from top of this board??

[xara]

What is the most straightforward way of contracting in Germany so as not to get on the wrong end of the taxman. Contract is fairly long-term so I probably wouldn't bother going through a UK limited.

Rate is between 400 and 500 a day, anyone any ideas of what I might be taking home? Could there be substantial costs associated with making my situation legit, paying an accountant, indemnity insurance, anything like that?

Thanks.