[ohthehugemanate]

I did this for a few years. Here are your options:

Employment by the US company:

They're allowed to employ you and have you "stationed" in Germany. You pay no US tax, and DE tax on 100% of this income. For Sozialversicherung, Rentenversicherung etc it's just as if you were selbständig. Since you're allowed to give up all sorts of rights in DE conteact Law, the US based contract is probably fine.

Contractor for the US company: this is OK too. Since the company does not have a DE presence they can't run afoul of the Scheinselbständigkeit rules. You really should register as a Gewerbebetrieb, GmbH or English Limited company though, as that solves a lot of tax questions for you. In any case as a selbständiger in Germany You should expect to get audited in the first few years... And this makes it less likely they'll find things you have to pay.

I am not a Steuerberater... But I've been in a two selbständig household in Germany for 7 years. My income was from international tech contracts, just like yours. And I went through a Steuerprüfung, where they decided that since I dont have a degree in CS, I can't be selbständig in that field. Didn't matter that I have a long resume of big organizations, and a letter of reference from the CTO of one of the biggest companies in Germany. I had to form a Gewerbebetrieb and pay back taxes for it. It sucked.

Also, good luck on finding a Steuerberater who will help you optimize at all. Technically tax optimization is illegal, so most are very cautious even talking about it. 99% are just form fillers.

[heipei]

Employment by US company: Did that for five years working remotely from Germany for a US Incorporated. I'm German, had a German contract with all the standard provisions for Germany (mandatory vacation, termination protections etc, employer contributions to health-care etc). Worked without a hitch, like being employed by a DE entity. The only gotcha is that my monthly pay would have social contributions and health-care contributions already deducted, but would not have income tax deducted. So you'd have to save up enough money to pay income tax yourself at the end of the year (or quarterly, depending on how competent your local tax office is). After five years the US parent incorporated a German subsidiary, and since then the taxes were obviously deducted as well.

Personal take on tax accountants or anyone in that profession: They're more than useless. As parent poster said, 99% are form fillers, so if you tell them that you're working for a US entity that is not paying income tax on your behalf some of them will flat out say "but that's not even possible" (yes, someone told me that). My tip is just to read up on some topics, band together with co-workers in a similar situation and then just do the taxes yourself using one of the popular services.

[romanovcode]

> They're more than useless.

Can attest to that. Had similar situation - Being DE tax resident however working for my own company that is not based in DE.

I had just a simple question - when and how do I pay my taxes here from the money I bring from my company that is not German. And they could not help me because they really could not understand that someone might be living in Germany but not working in Germany.

[movingbritde]

Did you ever find an answer to that question? Facing a similar scenario.

[romanovcode]

Nope. Best I got was - Send money as salary and do yearly returns as additional income.

[movingbritde]

I think taking a salary is the only way to do it. I've been reading about the concept of opening a German branch of the foreign entity as a more formal thing. But obviously I will need to seek out a professional who actually has a clue.

[siebology]

Seems like a German citizen could use Stripe Atlas to create a US company, and then hire themselves through that entity. Would be cool if someone creates and shares boilerplate contract language to hire themselves "stationed" in Germany and cover the standard provisions that Germany requires.

[throwaway9283i]

Which are the "popular services" you are referring to? Can you elaborate?

In my current specific situation there are no coworkers from Germany.

I didn't even know that a US-based company can give me a German contract. Do you know the specifics how the stuff got deducted automatically (except the taxes)?

[heipei]

For taxes I use the online version of WiSo Steuer for example: https://www.steuer-web.de These services can pull your records on file from the tax office, so all you have to fill in is any additional items (deductible expenses over the year for example).

I don't know any of the details of how the company made the employment work. If you PM me I will give you the name of our German accounting firm which handled everything.

[ohthehugemanate]

Interesting that you got it working with a US employer. My US employer never could figure it out. All the advice they got from German business lawyers was that they had to establish a presence in Germany. :|

[romanovcode]

> German business lawyers

It's because most German beurocrats are garbage when it comes to laws related to outside Germany.

[helge5]

Just a small clarification: You are still "selbständig" (self-employed) if you do a "Gewerbe". The thing you don't get easily is a so called "Freiberuf", particularly if you don't have an engineering degree (though I managed to get it).

Tax wise it is actually almost easier to do non-EU business than doing business in Europe, because there are no VAT issues involved (and there are no tariffs on those things). You just invoice the net value.

[johannes1234321]

The difference between "Gewerbe" and "Freiberufler" ist quite grey. I'm the software field I have often seen the distinction between creating software on your own (creative/artistic work - freier Beruf) vs. implementing other's requirements (production - Gewerbe) but in each case it depends on the tax officer looking at the files.

[cntlzw]

Yes, unfortunately. With a degree in CS you might get away with Katalogberuf: no Gewerbe, no Gewerbesteuer

[rad_gruchalski]

You don’t need a degree anymore. Experience comparable to a degree, documented with proper work contracts and references gets you there too. Source: myself, not German citizen, living and working in Germany as Freiberufler (alongside other things).

[throwaway9283i]

Can you go more into detail regarding the tax stuff? Who pays the VAT then?

[helge5]

Puh, I'm not a tax consultant, ask yours how and why that is. But you don't put VAT on off-EU invoices (not even within different EU countries I think). It's just net.

I think the reasoning is that a VAT - value _added tax_ - requires that the other party also pays VAT (you only pay the difference, the "value add"). Which simply doesn't happen if you are outside your own country. In "regular" cases this is compensated by tariffs, but there are none for consulting/dev AFAIK.

But again: ask you tax consultant :-)

[cygned]

In countries that have a tax agreement with Germany (e.g. Canada), the Reverse Charge procedure is used; you signalise that on your invoice. In that case, the customer is obligated to pay the VAT in their country and you bill the net amount. However, that depends on the service/product sold. If you re-sell development services, for example, you still have to pay VAT in Germany on a part of the amount billed while the rest is covered by Reverse Charge.

[dx034]

In addition, as the US has no VAT (sales tax is different from VAT), reverse charge then leads to no VAT being charged at all.

[leethargo]

In my understanding, if you have a client outside of EU, you can invoice them without VAT. It's the client's responsibility to pay VAT in their own country.

So that's what I do, and on my "Umsatzsteuererklärung" form, there is a field for income that is VAT-free, where I put basically everything.

[ohthehugemanate]

thanks for catching my mistake! I'm blaming auto-correct. :)

[skrebbel]

> since I dont have a degree in CS, I can't be selbständig in that field

Wtf? Is there a rationale for this rule or is it just German's super weird "degrees are everything" culture turned to law?

(I'm Dutch, were basically Germans who talk funny, but I'm very happy we don't have rules like these)

[helge5]

Well, he mixed up "selbstständig" (self employed) and "Freiberuf" (a specific tax setup for specific kinds of occupations). Unlike in many other professions he _can_ be "selbstständig" in the CS field without a degree, and he can create a GmbH w/o any special qualification. Which is pretty unusual in Germany :-)

It is very different in many other professions. So yes, you actually have to be an electrician with extra qualifications to be able (allowed) to setup an electrician shop (called a "Meister" ("master") but it is entirely different to the university master degree). This is even true for seemingly low profile stuff like haircutters, or painting shops!

And the rational should be obvious: You don't want to allow people to run a business which don't know how to write a basic invoice and you don't want an electrician who doesn't know how to properly install electric lines.

[ohthehugemanate]

Thanks for catching my mistake - I did indeed mean Freiberuflich.

> Unlike in many other professions he _can_ be "selbstständig" in the CS field without a degree

I'm not an expert here, I can only tell you that the Finanzamt Köln disagrees with this sentence.

IIRC they lumped "web development" in under "engineering", and therefore required qualification. The only way around it that I've heard of, is some front-ender friends of mine invoicing as "Web Designer", which counts as an artistic profession.

[ohthehugemanate]

Just the super weird "degrees are everything" culture. The foundation is, as helge5 mentions, that there are certain qualified professions where the guild should ~~get paid~~ certify everyone who practices. The stupidity is that "programmer" was counted as an "engineer," at least in my case. I see helge5 thinks you are allowed to practice CS without a qualification - I can only tell you that the Finanzamt Köln/Bonn disagreed.

And as the other commenters noted, I _did_ say "selbständig" when I meant "freiberuflich". Can I get away with blaming autocorrect? :)

[cntlzw]

Anyone can be selbstständig. Anyone can have a GmbH. Question is if you need to pay Gewerbesteuer. If you have a so called Katalogberuf you might be allowed to call yourself Freiberufler. They are exempt from Gewerbesteuer.

[leethargo]

In my case, the Finanzamt demand that I show them a degree in CS for my "Freiberuf" as software dev, but I only had a math degree, which was then accepted, too.

[Ded7xSEoPKYNsDd]

My understanding is that in your 2nd scenario (contractor), the tax/social security authorities might at some point decide that this is Scheinselbständigkeit, and therefore it's actually been scenario 1 all along. What I'm unclear about is whether they'll try to collect from the worker in DE or the company in the US.

[ohthehugemanate]

AFAIK Scheinselbständigkeit is a threat for the company, not the worker... and it's not a threat if the company is not based in DE.

But then, I always maintained one or two other contracts on the side. They made up less than 5% of my income, but their names were in my list of invoices. My tax advisor thought this was a good idea.

[throwaway9283i]

Probably from me. It wouldn't even be a problem for me. I even would pay all of this upfront so there is no hassle five years later.