4 ms·
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
by 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 agoThat'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 agoSince 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 agoYes 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 agoGerman 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 agoWow, that is excellent news! Hopefully that is the end of it.