Contractor in Germany, tax status

[jrewing]

Hi,
I'm hoping that someone can help me on this query for which I have had conflicting advice.

I will start to work for a German agency to work as an engineer in Germany for one year. I need to invoice the agency, so assume I will need to set myself up as a company or sole trader. My question is: do I set myself up in Ireland and declare income in Ireland (preferable), or do I need to set myself up in Germany and pay in Germany.

I have heard from a tax consultant in Germany that as Ireland is my permanent place of residence I should invoice from an Irish company - effectively I am only providing a service in Germany. However an Irish agency is advising me that I need to pay tax in Germany.

My wife and family will remain in Ireland, but I will be more than 183 days out of the country. The job will finish by the end of the year.

Any advice would be much appreciated.

 

[smeharg]

The German advisor is probably thinking there's not much point in establishing a German Ltd Co if you're only going to use it for less than a year.

I not familiar with the German tax rules but would imagine you'd be taxable in Germany as you are resident there. Another reason the German advisor may be recommending an Irish company. You may also be taxable in Ireland if you are here for more than 30 days.

You seem to think that the Irish agency knows more about German tax than the German tax advisor. I think I would listen to the German advisor, and ask for the reasons for recommending an Irish company. Then I would speak to an Irish tax consultant to see if the German advisor's advice can be implemented in an Irish context.

 

[jrewing]

n terms of residency, my principal residence (along with my family) remains in Ireland. I will be staying in hotels in Germany.

 

[Jim2007]

n terms of residency, my principal residence (along with my family) remains in Ireland. I will be staying in hotels in Germany.

You will be required register and obtain a work permit in Germany, so you will have to deal with taxes, social security and healthcare there, irrespective of whether you stay in a hotel or not.