Pensions and freelance English teachers in Germany

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I am totally out of my swimming pool here. Does any one know if freelance english teachers are r.v.pflichtig. I get differing reports. If this is the case, it looks like i will die of hunger before I can claim a pension as the amount they want is stupid. My steuerberater is trying to look into this, but has asked me to talk with other English teachers to see what they do.

 

Thanks for helping wipe the mud from my eyes in advance

Iain.

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If your Steuerberater does not know, then get another one (or charge him for finding the definitive answer)

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agree with YorkshireLad once again: if your Steuerberater can not come up with a definitve answer to this question for you, get one who can. It is not your job to do his work (unless he works for free, of course).

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Trust the guy who writes on that site I posted. He knows his stuff and has been fighting for ages to get the rules changed.

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There are some new rules about retirement insurance.

 

Basically a "trainer" can avoid paying retirement taxes if he can make the case that they will not be living in Germany for over three years. What you need is a special form that gives you an exemption from this tax. Does anyone know the name of the form?

 

Gazoo

 

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interesting. where did you hear/learn about this? what is the law/regulatiuon behind this change...?

Cheerio

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just to make this point clear - since I have noticed that the earlier contribution from 2007 was not fully answered: according to present laws (somewhere in the SOZIALGESETZNBUCH, have to re-check where so that I can give you verse and chapter) all self-employed people in a teaching profession (that includes golf pros, for instance, but also language teachers or Yoga teachers) are obligated to contribute to the public pension system. Since they have to bear the burden of both employer and employee, this comes to about 19+ % of their income (I think gross income).

If it is found out that you have not paid your contributions, they can back-charge you for up to three years - and they do, often after having audited a school or so. So beware and take actions if you want to avoid it that are fool proof. You can not substitute this by paying into any private pension scheme, whether it is German or offshore.

 

Cheerio

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I learned about the new retirement law from a tax advisor that advertises here on this site. I am not sure if I want bto pay his fees but he explained that people living here for a duration that is under three years can claim an exemption from the retirement tax.

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Hi Gazoo: I just checked with yet another tax advisor advertising here on Toytown since what you describe here kinda puzzled me, what he says is this:

1) Yes, there is in general an option for someone who starts a business (Existenzgründer) and only has one contract partner (and thus is in danger to be considered to be "Scheinselbstständig") to get an exemption from the obligation to pay into the public social welfare system - namely here the pension system - for the first three years

2) BUT: this does not apply to teachers and trainers etc as they are obligated to contribute to the public pension system anyway

 

So, unless there is yet another loophole not know to either me or another professional and tax advisor as that, I do still have serious doubts that what you say works. It may do so in general but not so for someone in a teaching profession. Sorry about that. You might want to double-check with your source. If I am wrong, please DO let me and others know, this is definetly not about me wanting to be Mr Know-it-all but rather to prevent others from falling into an expensive (pension) trap. If I am wrong, I will be happy as a dog about it...

 

Cheerio

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But isn't it right that you can get your contributions back from the German system anyway if you pay in for less than five years? In which case, it all works out in the end if you are here for less than three years anyway. You'd just take a short-term cash flow hit if asked to pay it.

 

I do EL teaching but it's not my only work and no visa involved. I understand from EL teachers (ie. hearsay / anecdotal but people I respect who've been doing it in Germany for years) that you can get a let off time of two years if your Steuerberater requests it. That's sound similar to what the OP is saying except that there's nothing "special" or "new" about it and so it should not be considered "special expert advice" but a routine Steuerberater process. Those sources also observed that that should be enough of an avoidance route (ie. if you are good enough, you will at some point be able to position yourself to get an "employed" job before that's up). There are also other clearly straightforward ways of not "just" being an EL teacher, assuming no visa limits.

 

Indeed, none of the EL teachers I know have ever been asked to pay this pension contribution. I see a lot of chat and worry about it on message boards but simply never come across it in "real life" (although I appreciate this may reflect local policy and priorities in a federal republic and not apply elsewhere).

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Does anyone have a reccomendation for a tax counselor who can set up all paper-work for a US citizen who will work in Munich as a free-lancer for two years?

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well, I talked to the tax advisor you thought you have your info from and apparantly there is some misunderstanding there. It could be because you chose not to disclose all important/valauble information a tax advisor really needs to give you good and ever-lasting advice. Same happens to me quote often that people withhold by mistake or misunderstanding some crucial information and then the first advice I give them turns out to be not entirely fitting because their situation is different. Since you and I knwo whom you talked to and since I share a lot of clients with him who are very happy with his services, my recommendation is to stick with him but next time to tell him everything about you without witholding a bit. In Germany there are three persons you need to be entirely open with: your spouse, if you want to live a happy marriage, your priest if you want to have a clean soul and your tax advisor if you want to be protected from evil (taxes/governement). If you don't care about your marriage or soul, lie to the spouzse and priest if you want, but never fail to disclose everything about your life to your tax advisor... worse than divorce or hell if you do :P

 

Cheerio

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Thanks for the tip but I believe you are mistaken. I gave my complete information and I received info that simply does not correspond to what I read here at TT.

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well, I can just reiterate that the same tax advisor you said you have the information from has confirmed to me on the phone that a freelance teacher or a freelancer with a job that is considered to be teaching (like a golf pro or a yoga instructor) can NOT get an exemption that way from the obligation to pay the contributions into public pension (unless there income is really very very low). What is true that other freelancers (like IT contractors, for instance) who might be in danger to be considered "Scheinselbstständig" because they only have contract partner can get an exemption for three years from public pension contribution and any other social welfare contributions so that there is no danger to the contractor and for the contractee to get charged later for "Scheinselbstständigkeit". But this does not apply to teaching professions. Sorry

 

Cheerio

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Gazoo - Starshollow will be correct.

Freelancers are not treated kindly in Germany.

But what's wrong with securing some pension rights?

Or do you not intend to live until retirement age?

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Indeed, none of the EL teachers I know have ever been asked to pay this pension contribution. I see a lot of chat and worry about it on message boards but simply never come across it in "real life" (although I appreciate this may reflect local policy and priorities in a federal republic and not apply elsewhere).

Dude, it can prove heavy when one wants to get his/her visa extended after first 3 years. Then, they are asked, by the authorities, to present "pension scheme" payment papers. Thats what my visa office wants from me.

I have been teaching for over 18 months now and have been earning over €400 monthly, fairly regularly.

Can I opt out of paying into the so called "retirement scheme". What are the options?

 

Any information will be highly appreciated.

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Do non-teaching work as well. If your visa allows you to of course. It's much easier for the authorities to push you down this route if you need a visa of course (and you have chosen to limit the type of work you do to teaching).

 

Presumably, all you can do is tell them you have no German pension arrangement and see what they say then. And present and you do have from your own nation of course.

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Hi swimmer.

Will a secondary teaching job help me in getting exempted from paying into DRV as a freelance teacher? if yes, how?

 

Thanks for your answer.

float

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