I don't like tax, can I get away with evasion?

I'm a contractor working full-time for a client. I have been offered an additional job working a few hours a week from home. The company is based in Switzerland and I'll sometimes have to be on-site, though quite rarely. I have been offered the job through an agency based in the UK.

So if I ask to get paid into an account in my home country, would I have to pay tax on this? I don't mean legally, but would the German tax authorities have any way of finding out about this additional income?

Would I have to pay tax in any country at all? As far as I can tell, I wouldn't have to pay in Switzerland because I don't live there and won't be there often enough, I wouldn't have to pay in the UK because It's just the agency that's there and the German authorities have no way of finding out about this income. Am I correct in that assumption?

Thanks for your input

I would never assume that the Finanzamt would never find out or never audit you. A lot of tax information gets shared between these countries and if caught it will be more expensive for you than paying what you are stautorily required to. It's also unfair to those who pay their taxes as they are supposed to. If resident in Germany you are liable for tax on income earned worldwide (the actual amount you would pay is often adjusted by tax credits).

Maybe you can do the work on a 400 euro basis.

Just pay your taxes, and stop trying to avoid your obligations. If you want to legally minimise your tax liabilities, which is a perfectly valid and sensible thing to do, then hire a Steuerberater with knowledge of cross border tax issues. Steuerberater costs are strictly controlled, and generally based on your turnover, and you'll probably get advice in a first session for free.

I don't think he/she could do a 400 euro job solution as the company is Swiss.

I guess you would have to put VAT numbers on the invoice sent to the Swiss Co. or the agency - not quite sure how various finanzämter use VAT numbers to track invoices or if it is indeed possible to do so, but I guess it could be

To be (dis)honest, the only way you can do this is to have the company in Switzerland pay you into an account in Switzerland where you, presumably, are not a resident.

I can just confirm what Conquistador says above: besides the moral and social issue of avoiding due taxes, paining as it may to pay them, you are facing a serious and high chance to get caught red-handed and then you have to pay back all the taxes plus penalty, not exactly a good deal... nowadays it is very hard not to leave a papertrail/digital trail somehow when the money gets moved around eventually and the European tax authorities are indeed cooperating better and better. my own tax advisor told me that to his surprise even countries like Greece, Spain or Ireland, who in the past had usually not even answered requests/inquiries from German tax authorities are now giving full account and information within a short time in such cases and even check out and audit local business when the German tax authorities feel that there is something fishy. The only countries yet reluctant to do so are reportedly Swizerland (up to a point only, anymore) and Austria. Thus I can only warn you to proceed the way you of tax avoidance you were contemplating...

If you want to reduce your tax burden in Germany and turn some tax money into something profitable for yourself, use the legit ways: invest in a RIESTER or RÜRUP pension plan where you can enjoy 3ß-40% tax breake effects on your investment or - providing you have a somewhat larger budget - invest into historicly protected real estate (denkmalgeschätzte Immobilie) in order to have the chance to write off considerable investment into the rennovation of such property against your other tax liabilities...

boomtown_rat: no VAT will be charged to foreign companies, VAT is an intra-country tax only. But you are right that official invoices which the guys contracting party would have to file for tax reasons at home anyway could well be the source of exchanging information with German tax authorities.

Cheerio

I freelance through an agency based outside of Germany and as a result, I don't charge the client VAT, as I am not required to pay it - at least that's what my tax-advisor has told me, so there's no VAT number required on any invoices I send.

I'd be surprised if the tax authorities between the 2 countries would exchange that much information unless someone was suspected of doing something dodgy. If the OP already has a full-time job and is paying tax on that and everything there is above board, then why would the German tax authorities go to the trouble of digging deeper?

I work in numerous countries outside of Germany and also invoice companies outside of Germany, including Switzerland. For those countries outside of Germany the only difference is that I don't put MwST on the invoice. Still pay tax in Germany though.

I wouldnt try to commit tax fraud, just to save a few bucks. European countries do actually cooperate with each other. And the cooperation gets better and better:

If you have a bank account in an EU-country and live in germany, the bank will inform the german authorities about this account and how much interest they pay you every year. (EU-Zinsrichtlinie) There are a few exceptions like Austria, who dont comply (but they seem to cooperate in other ways).

If your homecountry is an EU-country and the german authorities suspect you to commit tax fraud, they will have very few problems to get all the information they need. (Even countries like spain or greece have become much more willing to cooperate.) Every scrap of information they learn about you, while investigating someone (your agency, your clients) or something else (your returns on interest in the UK), can be used.

I assume that even the swiss tax authorities cooperate with germany, when they find clues (while auditing your swiss client) that you might be commiting tax fraud. They arent supporting crime and it wouldnt hurt their precious banking confidentiality, would it. Same goes for the english authorities...

I'm with colinmanning on this. Meeting your tax obligations is part of being an adult, rather than a child or a second class citizen scraping through life. So handles your tax affairs properly - without evasion - and seek out ways to avoid instead.

I'm freelance as well and it really annoys me that so many people assume here that I am avoiding tax. That assumption comes from the many freelancers who think they as so special that they shouldn't have to pay tax but live off others that do.

If you are an British citizen but not ordinarily resident there, then you should declare the income on your German tax return. You won't pay any tax in the UK on it if that's the case.

It's complex, get some proper advice.

it isnt that complex if you are a freelancer sending out a few invoices. I'm not sure why everyone's knee jerk reaction is always to 'get advice' - people don't react this way for many other issues in life that aren't that complex - especially with the wealth of resources on the Internet.

I appreciate that some situations can be complex but far from all are

One thing to bear in mind is that it's not just tax you're saving, but also pension contributions.

In the late '80's I was also working in several different places, mainly, but not only, the UK and Germany. Because I was moving about so much I effectively "succeeded" in paying no tax anywhere for about four years. I recently got pension estimates from both Germany and the UK and hey, look at that, I've got four years of entitlement missing in both countries!

Good point,RMA! always two sides to the coin...

Cheerio

To answer your question - yes...you can get away with NOT LIKING paying your taxes.

I suspect that many of us don't relish writing that check to the government...but alas...we do it anyway...!

xoxo
Belle

P.S. I'm not usually that sarcastic...but income tax evasion is one of my pet peeves...