Working remotely in Germany for a British company - TAX advice needed

Hello,
I was hoping someone could help me get to the bottom of my TAX enquiry please.
I have recently moved to Germany from London and am still working for my British employer but only 2 days a week and am still on the payroll.
I'm currently paying UK tax just as I would be in the UK but am worried that this is not the correct thing to do. My UK company seems to think is it the right thing but I've heard mixed answers.
I return to the UK every month for about 5 days.
Does anyone have any advice for me please?
Thank you,
Charlotte.

Hi and welcome to the Forum.

Where you are assessed for tax depends entirely on where you're domiciled (i.e. where you live); this is generally decided on where you live for the majority of a tax year.  I'm not sure of the German tax year, but the UK runs from end March > early April; this may complicate things a bit further.

From what you've said, I think you'll be classed as resident in Germany and have to comply with all the stuff that follows (Health Insurance, taxes, social taxes (?) etc).  Although I lived in Germany for many years, it was a long time ago, so not relevant now; so I'll defer to one of our German experts to pick this up.

Cynic
Expat Team

Cynic is right: You have to pay tax where you live and work - NOT where your employer is domiciled.
In Germany, the tax due kicks in from the first day you take a residence here (regardless of financial year, which here is the same as the calendar year).
Not having a Germany-registered employer complicates matters, as you are classified as freelancer (and thus self-employed) and have to arrange (and pre-pay for) everything on your own. In addition to income taxes (which you will have to pay a monthly amount estimated by the tax authority and this will be equalized after your yearly tax declaration, which is also compulsory to submit in your case), there are social security contributions. Most important (and expensive) of them the German health insurance, which you are obliged to join and which will cost you between €370 and €750 per month (in the public scheme), depending on your income (self-employed rate).
If you do not speak German at near-fluent level (and have a liking of buerocratic complications coupled with high frustration tolerance), you should engage a German tax advisor or startup consultant to sort out these things for you!

Thank you so much for your reply. Very helpful.
So, should I notify my UK employer and tell them that I should not be paying UK TAX and come off the Payroll?
Thank you!

Hi and welcome back; that sounds like a good start, perhaps a new contract as a Free-Lance supplier would assist you with something to show to the BZSt when you come to sort out your German taxes.  I would strongly support Beppi's recommendation to use a German professional suitable for whatever it is you end up doing.

Hope this helps.

Cynic
Expat Team

Whether you should or should not pay UK taxes was not part of my post. (I know nothing about the UK tax system.)
For countries Germany has a tax treaty with (UK is one of them), double taxation is avoided in most cases, but the details can be complicated - again ask a professional - if you don’t and make mistakes because of it, you are far more likely to pay double rather than pay less!

Thank you again!
Do you have any recommendations for German tax advisors or startup consultants please?
Best wishes,
Charlotte.

I could recommend you my tax adviser in Stuttgart, if that helps, but I don’t know if he speaks English. No idea about consultants. Google can help you!

beppi :

I could recommend you my tax adviser in Stuttgart, if that helps, but I don’t know if he speaks English. No idea about consultants. Google can help you!

Of course it is advisable to find a tax advisor locally. There should be plenty of them in Nuremberg that you don't need to take one in Stuttgart. One would assume that with their education level that most, but not necessarily all, would speak passable English. Just as important, one should ask if they have experience with such international situations.

TominStuttgart :

Just as important, one should ask if they have experience with such international situations.

Absolutely correct!
German tax law is already very complex before you even consider international issues - and many tax experts omit this even more complex and less often needed area from their studies. I had a tax adviser saying “Sorry, but ..” and sending me iff to look for an alternative once.

beppi :
TominStuttgart :

Just as important, one should ask if they have experience with such international situations.

Absolutely correct!
German tax law is already very complex before you even consider international issues - and many tax experts omit this even more complex and less often needed area from their studies. I had a tax adviser saying “Sorry, but ..” and sending me iff to look for an alternative once.

Yeah, like in law and medicine it often pays to look for a specialist. At least for filling out German tax forms there are set fees that German tax advisors can charge. So the difference might be the competency rather than the price you will pay.

Thank you both! You've been most helpful!
Charlotte

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