Using a private residence as a business address - Germany

I work for a US Engineering firm planning on doing work in Germany. Does anyone know if we can use a person's home address as a business address, or do we need to set up a PO Box address, and if so how do we go about doing so? Right now, we only have one person over in Germany and we are not ready to open up an office there quite yet. Your guidance is appreciated so we are sure to handle properly and by German law.

If you want to do business in germany you´d better look for guidance by some tax advisor.

Anyway, at the moment I cant think of any legal problems with using a private address.

I could be terribly wrong about this but perhaps a lawyer, not a public forum of expats, would be your best resource.

It may depend on the type of business. My husband and I have a small translation business, and use our home address as the business address. We've done this for 6 years, and our tax advisor has no problems with this. I suspect that most freelancers, or those running very small businesses (1-2 employees) do the same.

However, as the others said, it may be better to consult an expert in this case.

Good luck!

If it can be done in a "home office" then no problem. You can even tax deduct the office space, but it has to be a real "office" and only used for work. The type of business activities are restricted and that is basically to keep the character of the residential area "residential" ie no customers without appointments, no home auto repair shop and such. In my neighborhood, there are quite a few home businesses from Yachting something or other to an engineer that drafts all day in his upstairs office. The person that we bought our house from had a son that ran a web business from the upstairs bedroom and tax deducted half the room as an office.

I'd like to start a cooking show/web business and that being said, I'll be using the kitchen and my bedroom.Can I write off half the kitchen and my bedroom as tax deductable too?
Also, I'm currently renting my apartment, would I need to get permission from my landlord in order to operate?

Looking forward to your responses,

Chow!

Probably not - for several reasons. The most obvious: costs for an "Arbeitszimmer" at home can only be deducted when the room is used almost exclusively for business purposes. You wont be able to convince anyone that you are using your kitchen only for work. Same goes for the room you are sleeping in. If you have another room (living room) you could claim your bedroom is your office. It´s very unlikely that the "Finanzamt" will investigate where you are actually sleeping. They might ask for a floor plan though.

But even if you have an office that you only use for business purposes, that is not enough for tax year 2007 and after. You could only deduct the costs if this office is the center of all of your business and job endeavours. So if you have another job (anywhere outside of your appartement) it wont be accepted.

Anyway, talk to a tax advisor for professional advice.

Probably not, but Im not sure. As long as long as there are no obvious hints to your activity (dozens of clients every day, noise, ...) I wouldnt ask.

AFAIK you can operate a home office from a private (rented) address as long as you use the residence mainly for living in as (particularly in Munich) the council doesn't want private homes being used entirely as offices.

Thank you both Freising and Uncle Nick!

I'll certainly make sure I do some more homework too. I think I'll be alright with regards to the tax part as this is the only venture I intend to embark on.

Thank you again for your advice!

Chow!

Using part of our private residence as a business office / base is a non-issue in general: loads of people do it.

The attention needs to be, as pointed out here, on the details - that you *are* genuinely running a business, that anything you claim / report in respect of tax is a decent reflection of reality etc.

It is far more regulated than the US here.
You need a "Gewerbeschein" just as a starter (Licence to run a business).
You need to registered with the tax people if you are doing any inviocing,
and then there is VAT and so on.
Companies from other EU Countries can operate in Germany without
too many problems but it is a different story for US firms.
What about Bank Accounts? Do you want to open a Company Bank Account?
Then that is another hoop to jump through, although a bank like
the Commerz would be ready to help.

This response is at best misleading, at worst naive.
You don't always need a Gewerbeschein - it depends on your type of business and anticipated turnover
If you are already "registered" in so much as you have a tax number from your normal employment then no further tax registration is necessary. Some businesses (teaching or medical for example) don't even need to register.
VAT is voluntary below a turnover (or expected turnover) of €50,000/year
Companies from other EU Countries can operate in Germany, but their bookkeeping is more complicated as they may have to submit accounts in two countries. US Companies cannot operate here without formally declaring (and reporting for) a German subsidiary
Most bank accounts will welcome a new commercial bank account as this is where they often earn their most income. Opening a commercial bank account is straightforward if your paperwork is in order. If not, and your business in simple then you can use a personal account (but it may not be recommended for operational reasons as business and personal finances become confused)

Are you sure about that, YL? I thought the limit was about 17,500€, or is that the amount under which you can't register for VAT, even if you want to?

Sorry, I was not clear. When considering first registration for VAT if you can show last years turnover was less than €17,500 and this years turnover will not exceed €50,000 then there is no requirement to register. Irrespective of turnover you can always register voluntarily. On a long term basis, if you exceed a turnover of €17,500 per year for more then two years you are required to register. Note this is turnover (total of all VAT-applicable outgoing invoices), not profit.

Why dont you try www.addressgermany.com They provide mail and package addresses in Germany.