Moving to Germany whilst working for and being paid in a UK office

Please ask a tax consultant with experience in international matters, but this is my understanding:
In Germany, you are tax-liable with your world income as soon as you take up residence in the country.
Tax treaties may prevent you from being double-taxed.
In any case, you need to register with the German authorities (Gewerbeamt) as freelancer or self-employed and declare your income yearly to the German tax authority (Finanzamt) - whether it's exempt from German tax by treaty or other reason is theirs to check, not yours.

Thank you very much for your advise and expertise, it is appreciated!!

My experience of the Double-Taxation agreements are that they refer to income tax only and basically say that they won't tax you again for income you've already paid tax on.  This is fine, as long as the 2 countries have similar tax structures.  I was similar to you, except living in Holland and was hammered by the Dutch tax man because they were/are very different, with all the compulsory and very different salary related funds they have.

You'll still pay National Insurance in the UK (that's not part of the DT agreement).

Thanks for your input Cynic!

My understanding is that as you say, the DT agreement is just for income tax, I am happy with that, I just could not afford to pay additional income tax in Germany. I would pay all the other taxes they have of course, like council tax etc... My wife will sort all that out

I have tried my best to make sense out of the official documentation for the DT agreement, and a lot of it is over my head. I am not sure if after 183 days in Germany I will have to pay income tax there as well, if that is the case I am in a bad situation, I hope it is not the case.

I have done a fair bit of research and I read a lot that the German tax system is very complicated, so I have a bit more digging to do.

Thanks!!!

My advice is to go over to Germany and see a tax adviser before you make the jump.  They'll tell you the relevant information.

I think that is a good idea, and I will do that when I go over to visit the in laws.

You mentioned you were in Holland and paying tax there as well as in the UK, will it still be the same today? I do not think there is a DT agreement with the Netherlands. I was considering moving to Holland too as it still would not be too far from where we need to be.

Thanks!!!

LOL - there are loads of agreements between the UK and Holland; follow this link to see them all.

The German ones are here.

Where about in Germany are you looking to move to; we lived there for 15 years.

Ahhh so there is

Cheers for that. It seems the 183 day rule is also in effect with the Netherlands, which is not good for me.

My wife is moving back to Germany to be with her parents, the plan was for me to come over and we would get an apartment in Kassel, Germany, or someplace in the Netherlands. It seems my only way to do this without paying tax in both  Germany and the UK is to try and get a job in Germany, which sucks as I have a good job just now.

I will talk to a tax expert in Germany and see exactly what I will be out of pocket before looking for a job.

Cheers for all your help!

Kassel is a good 3 hour drive to the Dutch border at Venlo at the best of time.  We were lucky that we lived only an hours drive from my wife's parents (I used to commute in the summer).  Wherever you go, you'll pay taxes; I just found this web-page which while it's not official, does list all the social taxes you have to pay in Germany, these are not part of the Taxation agreement and you'll have to pay them if you are classed as resident in Germany; it's pretty much like Holland (unfortunately).  I'd definitely go see a tax adviser before I jumped.

The information on the website linked to by Cynic above is not up to date, but can still give you a rough idea of what to expect.
Social security contributions (Renten-, Arbeitslosenversicherung) are not required for freelancers or self-employed, as which you'd be classified without a German employer. Health and care insurance are compulsory for all and you'll pay the full contribution from your own pocket (unlike employees, for whom the employer pays half).

Like already mentioned, if you live in Germany you will get taxed there on your world-wide income and the German tax rates will apply. But why do say you will get double taxed having mentioned that there is a tax agreement between the countries? As an American, I can say that Germany and America have such an agreement concerning social security taxes. In general, America and one Latin American country are the only ones that tax their citizens residing abroad. But even America provides an foreign earned income exclusion for approximately the first 100000 dollars - plus tax credits and deductions for maintaining a residence abroad and some initial moving costs. I don't know the British tax laws but would be very surprised if there were not similar rules. You need to ask an expert that knows the German and British laws but I think it is premature for you to conclude that you would have to take a job in Germany. Also, what kind of work you do can make a difference. As mentioned, a self-employed person in Germany must get health insurance and things like retirement will be out of your pocket. But there is also something called the Kuenstlersozialkasse. This is not only for artists and performing artists of all sorts but people who teach these things as well as independent journalists and writers. If one qualifies to be in the Kuenstlersozialkasse, then one is required to join. What it does is take a bit over 15% of your income from art or journalism and matches it with a contribution from the government. From this money you will get health insurance, retirement and certain benefits if you cannot work due to injury or sickness or for care in your old age. Some may not like that it is compulsory but it sure beats being self-employed and having to pay the full cost of these things.

Just to give you some Details:

- Income tax and social security obligations follow different rules.

- Taxation:
(a) If you perform your work in the UK (physical presence is required) you remain liable to income tax in the UK.
(b) If you carry out your work in Germany you will become liable to German income tax if your emplyoer sends you to Germany and you are working for more than 183 days in Germany.
(c) In other cases you will be liable to German income tax from the moment on you become resident in Germany.

Social security contributions:
- Social security obligations follow different rules. There is a EU-regulation in place which regulates cases like this.
- If your employer sends you to Germany you may remain for 24 months in the EU social security system (a special assignment agreement is required).
- Otherwise complicated rules have  to be followed.

If you will live permanently in Germany and work mainly in Germany you will not be able to avoid German Taxation and social security obligations.

More Information you may find in the tax-blog on scheller-international