Taxes for foreigner self-employed in Germany

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Hello,

 

Is anyone able to help me on the following issue? ...

 

I'm currently working as self-employed in Romania, in the IT business. I want to work and live in Germany, and recently I have found a company in Bavaria to work for.

 

I know that, since Romania is an EU state, it is possible to work as Romanian self-employed for maximum 180 days in Germany, and to pay all the taxes only in Romania: wage tax, pension and health.

But after my self-employed contract would expire, I would like to continue working as full-time employee for the same German company, and pay all the taxes in Germany only.

 

Can anyone tell me if is this possible? I don't know exactly how the German finance is considering income taxation, would it consider that my Romanian self-employed (called PFA) and my German employee status are two different things, even working for the same company, therefore the yearly German income would only be the one from my full-time employment, and only pay German taxes for that one?

 

The reason for first working as Romanian self-employed in Germany is that currently in Romania the taxes for IT self-emplyed are quite low.

 

Thanks in advance for you help.

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Since the vast majority of us on this site are taxpayers here in Germany, I don't think there is going to be much interest in providing tax avoidance services to you (and free, no less) while you use the public services paid for by the rest of us. I don't think your plan is going to work, not least because you have to have German health insurance (at your own expense), from Day 1 if resident here as a freelancer, plus you'll need a work permit to be a freelancer while resident here.

 

The general rule is that if you are resident in Germany, income earned globally is taxable, so you can't simply pay Romanian taxes and avoid German ones as a freelancer (you'll end up paying German tax anyway). Furthermore, if you're working freelance for a single client whom you later work for as an employee, the two of you might end up with a big tax headache down the line.

 

Please note: nothing in this post should be construed as professional advice.

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Hi,

 

Thanks for your reply.

 

 

Since the vast majority of us on this site are taxpayers here in Germany, I don't think there is going to be much interest in providing tax avoidance services to you (and free, no less).

 

I'm not sure that I understand: do you feel proud for paying the taxes in Germany, or do you feel sorry that you cannot skip them, as I would like to do??? I just want to pay the taxes in Romania for a couple of months.

 

Actually, you're also paying your taxes elsewhere, ... in Greece.

 

Obvsiously that I'm not trying to get rich, I'm only looking into having the best LEGAL solution for this.

 

I know "there's no free lunch": now I just want to know IF this is legally possible, but not also HOW? For the HOW I'm more than willing to pay :) . Wouldn't this be really funny??? a Romanian paying a German tax advisor for not paying taxes in Germany.

 

 

I don't think your plan is going to work, not least because you have to have health insurance (at your own expense), from Day 1 if resident here as a freelancer, plus you'll need a work permit to be a freelancer while resident here.

 

I don't need a work permit to work as Romanian freelancer in Germany. I already have legal freelancing ID in Romania and allowed to work anywhere in the EU as self-employed. It's possible for me (self-employed) to sign service providing contracts with any EU company.

For the Health insurance and pension I would need to obtain the "E101/A1" certificate, valid anywhere across EU; the only big question (as I already said) is whether the German finance would consider only my employee income for German taxes?

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I'm not the one seeking free tax avoidance advice online. ;)

 

You will need a freelance permit if you work while resident in Germany for a company anywhere in the world (it could be a different story if you are employed by your own company). If you don't like that and don't want to pay German taxes on your freelance earnings, stay in Romania while you work freelance or have the German company bring you on earlier as an employee in Germany. As I told you, all of your income will be taxable here when you are resident in Germany. You should consult a German tax accountant anyway, regardless of whether you want to stay in Romania until you take up employment in Germany (which will also require a work permit).

 

One other thing- you try using the E101 to avoid having German health insurance while working as a freelancer for a single client that is located in Germany, while living in Germany, you're probably going to end up in a world of hurt (financially).

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according to EU regulations you can get yourself the former E-101 form which will exempt you from paying into the German social welfare system in Germany for limited time as a self-employed person. You have to get this thru your Romanian national health insurance, I guess.

Not sure how this is going to work-out tax wise as you think. If you work 180 days in Germany you would then have to stay the rest of the entire tax year outside of Germany in order to escape German taxation. If you take up an employment in Germany shortly after your 180day stint as self-employed is over, you will of course be considered to have been a tax resident for the entire year. It is not about how long you work as self-employed in Germany but how long you have your centre of living in Germany, regardless of occupational status. So, based on what you describe above I don't think it is gonna work like you want - but you'll need a tax advisor for this to be sure.

 

Cheerio

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This is correct.

 

The German system does not distinguish between money earned on a self-employed basis or in permanent employment. All earnings for the year are collected together in the Jahresabschluss.

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Thank you for your opinions over this.

 

You're right. That's hardly possible. Better to work as employee.

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On 12/13/2010, 3:12:50, adyi04 said:

Hi,

 

Thanks for your reply.

 

 

I'm not sure that I understand: do you feel proud for paying the taxes in Germany, or do you feel sorry that you cannot skip them, as I would like to do??? I just want to pay the taxes in Romania for a couple of months.

 

Actually, you're also paying your taxes elsewhere, ... in Greece.

 

Obvsiously that I'm not trying to get rich, I'm only looking into having the best LEGAL solution for this.

 

I know "there's no free lunch": now I just want to know IF this is legally possible, but not also HOW? For the HOW I'm more than willing to pay :) . Wouldn't this be really funny??? a Romanian paying a German tax advisor for not paying taxes in Germany.

 

 

I don't need a work permit to work as Romanian freelancer in Germany. I already have legal freelancing ID in Romania and allowed to work anywhere in the EU as self-employed. It's possible for me (self-employed) to sign service providing contracts with any EU company.

For the Health insurance and pension I would need to obtain the "E101/A1" certificate, valid anywhere across EU; the only big question (as I already said) is whether the German finance would consider only my employee income for German taxes?

Not a professional advice.

 

You can setup a Romanian or Bulgairan comapny and invoice the German company from there. (just realised I am only 10 years late exploring this...)!

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