Running a UK limited (Ltd.) company from Germany

107 posts in this topic

Ps - don't know if this will work, but here is an explanation from the Gewerbe in Berlin translated through Google on legal status of Ltd's in Germany: http://translate.googleusercontent.com/translate_c?hl=fr&rurl=translate.google.ca&sl=de&tl=en&u=http://www.gewerbe-anmelden.info/rechtsformen/ltd.html&usg=ALkJrhg-iAh5h500Nz0eWly5bRoIhbmoCA

0

Share this post


Link to post
Share on other sites

 

The EU is a free-trade zone and a British company is a legal person, therefore pays taxes in the jurisdiction where it is based.

When you say "based" - if you mean where it is setup or registered - that is total horseshit.

 

 

Example: my LLP's 2nd director is in a third country, not in Europe. She is silent and doesn't receive a salary, and does not need to declare anything on her local taxes.

Sure. She is just a Director. Not paid anything - therefore has no tax to pay anyplace.

Edit: As an LLP member she will be liable for personal taxation on the LLP earnings, regardless of what she takes out...depending on the split agreed.

 

 

If my LLP brings in £75K p.a. I decide how much to pay myself, say £15K, and as a German resident I pay tax on THAT amount.

Sure. You are an employee in Germany earning £15k. Doesn't matter if paid in €uros or Sterling. You live and work here, so pay taxes here.

Edit: Sorry, wrong. As an LLP member you are immediately liable to personal taxes on that £75k.

 

 

The remainder i can re-invest in the company - taxes paid in the UK. The LLP is a legal person unto itself, and pays taxes in its jurisdiction - England & Wales.

Nope. That statement is random horseshit. Depends where the work is performed. If the work is done here in Germany, especially by a German Director then it pays taxes here.

 

 

Because the company is Internet based, it exists as a UK legal person and company income, even if you have some clients outside the UK, taxes still go to the UK.

Rubbish. Doesn't matter a toss where the company is registered. All about where the work and employees are based.

 

Here is a perfect example as to why you are talking shit:

 

Corporation tax in Ireland is 12.5%. If your statement about companies paying taxes only where registered - we would all be running companies based in Dublin. Once the Germans catch up with you it will get messy indeed 'cos you have been paying Corpation Tax in the wrong country.

5

Share this post


Link to post
Share on other sites

http://www.shlandes...ectors/llp.html

 

International Issues

The position will be similarly complicated for non-UK resident members of an LLP if the members' country of residence considers the LLP to be a corporate body for local corporate taxes. In such cases it may regard profit distributions made to the members as dividend distributions and deny tax credit relief for any taxes paid by them in the UK (where the LLP is carrying on its trade or profession).

 

Note: All about where the LLP is carrying on its trade or profession.

 

A UK LLP can be incorporated with wholly non-resident members and unless that LLP trades, or holds investments in the UK, its members should have no UK liability on their share of the LLPs profits. However, that could mean that the LLP would have no UK taxable presence and thus we are recommending that every LLP has at least one UK resident member, paying tax on its share of profits in the UK.

 

Note: I hope you have at least one UK resident member.

 

It pretty much comes down to where you have your "Permanent Establishment/s" for the business:

 

http://en.wikipedia...t_establishment

 

Bigger International Companies (i.e. BP) will of course have offices and operations in several countries. Sales & Profits are then allocated to each country where they arise. So might pay 25% in the UK, 25% in Germany and 50% in Nigeria or wherever.

 

Needless to say you have painted a picture of an LLP that is being run and operated from Germany. Therefore any part of the profits derived from this work in Germany will be German taxed.

 

50% of my own Ltd company income is from the UK - but 100% of my operation is run here and so 100% of my corporation taxes paid here.

0

Share this post


Link to post
Share on other sites

Something to be aware of is that the german tax authorities don't recognise dividends, that's to say that they treat them the same as salary.

 

That means that if your Ltd Company is paying UK Corporation tax and you pay yourself a dividend then you will pay full income tax on the dividend AND the company will pay Corporation tax on the same money.

 

If this is your situation they pay yourself everything as salary. This then is deducted from the company's profits where of course dividends are not.

1

Share this post


Link to post
Share on other sites

and from HMRC themselves:

 

http://www.hmrc.gov.uk/manuals/intmanual/intm120210.htm

 

COMPANY RESIDENCE: THE LAW -

 

ITH300 Company residence: the law: basic residence rule

 

There has never been a statutory definition of what makes a company resident for the general purposes of the Taxes Acts. Yet it has long been recognised that the residence of a company is determined according to where its central management and control is to be found. That is still so even though since 1988 a company incorporated in the United Kingdom is, with some exceptions, regarded as resident in the United Kingdom for the purposes of the Taxes Acts. That rule overrides but does not eliminate the test of central management and control.

 

I wonder where the CENTRAL MANAGEMENT and CONTROL for your LLP might be then?

0

Share this post


Link to post
Share on other sites

May I point out that this was a discussion about a UK Ltd, which in germany is considered to be a "Kapitalgesellschaft/Körperschaft" and therefor subject to Körperschaftsteuer. A UK LLP seems to be something completely different. According to my sources UK LLPs and US LLCs can be considered either a "Körperschaft" or a "Personengesellschaft", depending on how they are organized. Personengesellschaften are treated (taxed) differently in germany.

1

Share this post


Link to post
Share on other sites

You can - but I was just pointing out that "Tegelsee" was talking crap, and either way he should be paying his company taxes in Germany and not in the UK. In fact it is almost certainly WORSE that he is an LLP 'cos even harder to argue when the actual partners are overseas & the Germans *may* want 100% tax payments the same year. (i.e. treat like normal income).

 

My points apply in fact even more so to a UK Ltd.

2

Share this post


Link to post
Share on other sites

http://www.ukbusines...hp/t-98078.html

 

Ooops gets worse for an LLP & Tegelsee.

 

 

The members of the LLP will enter their share of income on their personal tax returns - via the partnership pages - and that will generate a personal tax liability. It doesn't matter if the profits are distributed from the LLP or not.

Corporation tax never applies to an LLP either here or Germany. For both countries it triggers an immediate personal tax liability for the members. If it earns £75,000 profit then you pay the tax on £75,000 as personal income (or split with members of course)...regardless of how much you physically take out.

 

So in Tegelsee's example he is evading taxes both in the UK & Germany. The LLP cannot earn £75k and only pay a member £15k and sit on the cash (like a Ltd could).

2

Share this post


Link to post
Share on other sites

Wow, this is the first time I have been "attacked" in such a foul way. I haven't read such foul language in ages. I would understand if I offended someone.

 

For the record, I'm not evading any taxes, and the third party living overseas isn't either. With international tax treaties, she pays taxes in her country of residence.

 

Thinking now of deleting my account... I don't need to be reading such foul language on this site, and JE, I reported you.

1

Share this post


Link to post
Share on other sites

The most foul language I could find was "Rubbish", which I agree is pretty foul, particularly if it's left to fester, but if you haven't read such foul language in ages you must be living under a stone.

 

I bet JE is shaking in his boots, but rather than wimp out, why not be a man and argue your stand? It might actually be that you are evading taxes, albeit unknowingly, so you might actually learn something to your benefit.

6

Share this post


Link to post
Share on other sites

If you think you've been the subject of a "foul" attack, you must not get out on the internets much, Tegelsee. Furthermore, if you're going to post incorrect "facts" on a public forum, you have to be prepared to deal with the response.

 

Johnny English is a long-term member in good standing. This is a site for adults. Therefore, reporting JE's posts with the reasoning that children are reading them is not a valid complaint and your reports have been closed without further action.

 

It is your choice whether you wish to deactivate your account and leave the site. You can use this link if you are so inclined.

2

Share this post


Link to post
Share on other sites

 

Thinking now of deleting my account... I don't need to be reading such foul language on this site, and JE, I reported you.

I'll bet he's fucking shitting himself.

7

Share this post


Link to post
Share on other sites

 

... the reasoning that children are reading them is not a valid complaint and your reports have been closed without further action.

 

We're all children here....

0

Share this post


Link to post
Share on other sites

 

'cos you have been paying Corpation Tax in the wrong country.

 

I thought that this was the foul language mentioned but it wasn't "copulating tax" after all.

2

Share this post


Link to post
Share on other sites

 

Wow, this is the first time I have been "attacked" in such a foul way.

 

You need to get out more ;)

1

Share this post


Link to post
Share on other sites

Sorry, I could have been politer. Just saw red 'cos the advice in the post was so incorrect in almost every respect.

 

Fortunately his company was only incorporated on the 4th July 2011, so he still has time to get things correct, and sort his tax affairs. As a lawyer it is clearly especially important to stay the right side of the law, so ironically I rather think I have helped. But not expecting any thanks!

8

Share this post


Link to post
Share on other sites

Very basic question, please...

 

I might be offered a contract in England which would require me setting up a Limited Company.

 

If I chose to return to Germany, say, every second weekend, could I just pay UK tax?

0

Share this post


Link to post
Share on other sites

It depends on where you consider to be your residency. For example where do you consider home to be? Any wife/kids left behind? Where are you formally registered? Are you located there for more than half the year?

 

Not withstanding your tax situation, why would you be required to set up a limited company?

0

Share this post


Link to post
Share on other sites

Hello all,

 

I have a few specific questions that I hoped to we answered, and that are not covered yet as far as I can see.

 

We are to set up a UK ltd, and were wondering if any of you know of a good trustworthy company here in Germany that can help out. Having worked with setting up UK ltd companies for Norwegians a lifetime ago, I know (at least back then) that there where lots of one-man bands sitting in a garage and “helping” customers do just this. Many of these “UK ltd consultants” went under or simply disappeared, and my company at that time had to deal with lots of the owners of ltd’s that all of a sudden where standing without registered offices and so forth.

 

Maybe the situation is different over here, but recommendations would still be welcomed.

 

Secondly, we would like one (or all 3) of the 3 owners to stay anonymous. I know we offered this service to our costumers (again, this is some 13 years ago) – can this still be done without a problem or are the any issues we need to be aware of?

 

Thirdly, if you know of a company that can do the 2 points above, and in addition advice on how to structure a more complex setup of several ltd’s (one will own the brand, the other will stay on the rental contract, etc, everything to shield of the different parts in case of a default) would be great.

 

The plan is to have the UK company as a dormant one, while the German one will be trading, so I hope/ assume that the company we choose to help us set up the UK ltd can also help with filling out the accounts once per year - as its not trading this should be an automated service? (again, assumptions based on work done a while back in another country)

 

Just to clarify, none of this is to avoid taxes in any form, its for minimize the risk and liability.

 

Many thanks,

Tradian

0

Share this post


Link to post
Share on other sites

http://www.businessl...865436&type=PIP

 

If worried just set 'em up yourself. Rocket Science it is not.

 

http://www.companies...Addresses.shtml

 

Q. Will directors still have to provide their residential address to Companies House?

 

A. Yes. Every director must provide both their usual residential address and, for each directorship, a service address. The service address will be on the public record; the residential address will be protected information. A director may choose to use his residential address as his service address; if this is the case the service address will still appear on the public record, but the fact that the two addresses are the same will be protected information.

 

 

filling out the accounts once per year - as its not trading this should be an automated service?

If it is not trading - then there are no accounts? You can do the Annual Returns online in 20 seconds for a dormant company. Do pretty much everything online actually. Just got to the Companies House website and you can figure it out yourself.

 

 

in addition advice on how to structure a more complex setup of several ltd’s (one will own the brand, the other will stay on the rental contract, etc, everything to shield of the different parts in case of a default) would be great.

Sounds like you want "legal" advice not "tax" advice. Sounds a bit messy to me. Simple is good in my opinion.

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now