Working as a freelancer in Germany

Hi,

I have been living in Germany for three months now (without a job). During this time I have seen a few opportunities to do some freelance type work for companies. The problem is that being Australian I cannot work as a freelancer.

I was wondering if I set up a company (or be self employed) in Australia could I then do work for a German company and invoice them "from Australia".

I assume theoretically this is possible. Hypothetical example:

I am living in Australia and working as a self employed photographer. Some company in Germany comes across my website, likes my work and asks me to do a job for them. All correspondence is done via telephone and internet and I email them the finished product. I then invoice the company for the agreed amount and they send me a cheque/bank draft/etc. I will put the payment through the books in Australia and pay tax on any profit.

So my questions are:
1. I'm not actually physically in Australia, but in Germany, would this make a difference? I could still receive payment in Australia and pay tax on it there.
2. What does a German company require on an invoice? Does it need a some sort of VAT number, etc?
3. What other issues might I need to consider?

Thanks any help.

Unfortunately it's not quite as simple as that, unless you really will be living elsewhere for most of the year.

1. AFAIK, German law states that to live here and register as a freelancer overseas, you have to be resident in the country of your business for a certain number of days per year (don't remember off the top of my head, but think it's well over 6 months). Obviously if you're living here, you're benefitting from amenities funded by the taxpayer, so the German government won't be happy with another country getting your tax.

2. Yes, you need a VAT number - and the official address and contact details of your business (as well as various other information).

So I don't think it's going to work as you envisage it, though I'm not an expert.

No can do. It all depends on where your "tax home" is. If you live in Germany longer than 6 months, your tax home is Germany and you are required to pay German taxes. You are also required to charge your German clients Umsatzsteuer (VAT), currently 16%.

Also, you need to register as a freelancer and get a German tax ID number, which is what the German clients need to see on the invoices that you provide to them.

It depends on where you are a tax resident, nothing more. If you claim tax residency in Australia (that is, you have to prove that it is your primary residence, regardless of how much time you spend there), then you can invoice from oz and it you don't have to do a thing in Germany. You do NOT have to charge VAT, if your employer has a VAT number, it just needs to be referenced on the invoice. You also do NOT need a German tax ID if you are issuing invoices from abroad. I Invoice clients from the Czech Republic (where my company is registered, and where my primary residence is located) and have never had a problem. You basically will have to prove that you are in Germany to work for a client. If you need any help or want some advice firsthand, send me a message and I can put you into contact with my German tax adviser if you'd like.