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I pay full taxes. I am employed by my UK company, this means that I pay all the German taxes on my salary (health &employment insurances, pension, etc.) and of

by Loic 15y ago

I pay full taxes. I am employed by my UK company, this means that I pay all the German taxes on my salary (health &employment insurances, pension, etc.) and of course pay the corporate taxes in UK. I did it for two reasons: - simpler to manage a UK limited from anywhere (we tend as a family to move quite a lot, so the limited is a fixed point for my customers. - the German limited is not "limited" if you run it alone. If something goes wrong, as you run it alone, you lose defacto the limited liability. So, all in all, better to go this way even if sometimes it costs more (2 accountants one in UK and one in Germany). As said, for me the goal was and is not to pay less taxes. I am happily paying taxes. If I pay a lot it means I make a lot :)

deleted 15y ago
[deleted]
Luc 15y ago
I'm not a lawyer nor any kind of expert, but I don't think what you are doing is completely legal, and might get you into trouble with the German tax people if their eye falls on you. I have looked into this myself some time ago, and the problem appears to be that some countries in Europe (including the UK) apply 'Incorporation Theory', while others (including Germany) apply 'Real Seat Theory'. 'Incorporation Theory' states that a company is governed by the law of the country where the company was incorporated. So far so good. 'Real Seat Theory', however, states that a company is governed by the law of the country where the actual decisions are made (location of company directors). In your case, this would be Germany. This means you may in fact be MORE personally liable now, since under German law your company is de facto German, but unlawfully so, and you have that way lost whatever protection you would have had under German law. Again, caveats apply, I have a business but I am not an expert, though I feel you should consult one.
- danmaz74 15y ago
  That's what I understood too (in Italy it is like in Germany). So I would need to have a front man in the UK to be absolutely sure, but I don't like that. This is exactly the kind of worries that I would the EU to abolish. Not easy of course, and not something I would expect in a few months, but it there isn't anybody pushing in the right direction, we could wait forever...
- Loic 15y ago
  Since 2002 this real seat theory has been ruled out by EU, yes EU do a lot of good things :) http://www.germanlawjournal.com/print.php?id=214 http://www.germanlawjournal.com/print.php?id=214
  - Atropos 15y ago
    Yes you are correct for company law, but not tax law, see the §§ 1, 2 of the german corporate income tax law. ("KStG" http://www.gesetze-im-internet.de/kstg_1977/BJNR025990976.html http://www.gesetze-im-internet.de/kstg_1977/BJNR025990976.ht...). Unfortunately there is no official english version, but the tax code is formulated in such a convoluted way that GoogleTranslate can't make it much worse ;)
    - Loic 15y ago
      German taxes, more than 1000 pages of new rules written each month, nobody can follow, not even the state employees taking care of checking the submissions. For the tax part, I have a very good German accountant with a very good knowledge of all the cross border rules. Everything is done through chartered accountants both in UK and Germany to avoid issues.
  - Luc 15y ago
    Wow, that is excellent news! Hopefully that is the end of it.

by Loic 15y ago

deleted 15y ago

[deleted]

Luc 15y ago

I'm not a lawyer nor any kind of expert, but I don't think what you are doing is completely legal, and might get you into trouble with the German tax people if their eye falls on you. I have looked into this myself some time ago, and the problem appears to be that some countries in Europe (including the UK) apply 'Incorporation Theory', while others (including Germany) apply 'Real Seat Theory'. 'Incorporation Theory' states that a company is governed by the law of the country where the company was incorporated. So far so good. 'Real Seat Theory', however, states that a company is governed by the law of the country where the actual decisions are made (location of company directors). In your case, this would be Germany. This means you may in fact be MORE personally liable now, since under German law your company is de facto German, but unlawfully so, and you have that way lost whatever protection you would have had under German law. Again, caveats apply, I have a business but I am not an expert, though I feel you should consult one.

danmaz74 15y ago
That's what I understood too (in Italy it is like in Germany). So I would need to have a front man in the UK to be absolutely sure, but I don't like that. This is exactly the kind of worries that I would the EU to abolish. Not easy of course, and not something I would expect in a few months, but it there isn't anybody pushing in the right direction, we could wait forever...
Loic 15y ago
Since 2002 this real seat theory has been ruled out by EU, yes EU do a lot of good things :) http://www.germanlawjournal.com/print.php?id=214 http://www.germanlawjournal.com/print.php?id=214
- Atropos 15y ago
  Yes you are correct for company law, but not tax law, see the §§ 1, 2 of the german corporate income tax law. ("KStG" http://www.gesetze-im-internet.de/kstg_1977/BJNR025990976.html http://www.gesetze-im-internet.de/kstg_1977/BJNR025990976.ht...). Unfortunately there is no official english version, but the tax code is formulated in such a convoluted way that GoogleTranslate can't make it much worse ;)
  - Loic 15y ago
    German taxes, more than 1000 pages of new rules written each month, nobody can follow, not even the state employees taking care of checking the submissions. For the tax part, I have a very good German accountant with a very good knowledge of all the cross border rules. Everything is done through chartered accountants both in UK and Germany to avoid issues.
- Luc 15y ago
  Wow, that is excellent news! Hopefully that is the end of it.