Yes and no. If the US company is not registered as an employer in Germany (basically, has a subsidiary in Germany), then you’re not an employee under the German law, which means that you have to work as a freelancer (self-employed, pay health insurance yourself, and so on), and the US company must thus be willing for you to work as a contractor instead of as an employee. At least that’s my understanding.
Working for US company remote from Germany as A German citizen
11–20 of 36 posts
Re: Working for US company remote from Germany as A German citizen
#12Earlier quoted context omitted.
He still has to deal with taxation in his own country
yes but at least his taxes are paying for healthcare and other social services he wouldn't be able to access as an american.
No, they have to pay their own health insurance in Germany and deal with taxes themselves as a self-employed person. Additionally, most likely they have to foot in for pension and a couple of insurances to be on the safe side. Germany is €€€.
I’d also recommend getting a Steuerberater. They’ll need it. Mistakes are expensive. And don’t spend any money in the first year. Second year taxation will be 3x the nominal rate: tax for the first year, most likely full prepayment for the second year and quarterly payments of 25% for the following year. Ah, and Gewerbesteuer, unless they qualify as Freiberufler…
Re: Working for US company remote from Germany as A German citizen
#13Yes, you should be extremely happy you are not a US citizen trying to do this. Your arrangement is extremely simple and easy to do legally. IRS taxation of Americans abroad is vexatious and obdurate. Don't even get me started about taxation of Americans owning shares in foreign corporations.
Aren't us US citizens the only people who get taxed regardless of where we live and work ( yes I know the first 130k is exempted, it's still outrageous).
Depends on how you define it.
Australians can still be required to submit tax returns/pay taxes when living and earning money while overseas.
The rule is "Australian resident for tax purposes", and even if you never set foot in the country for the whole year, you can still be a resident for tax purposes.
Re: Working for US company remote from Germany as A German citizen
#14Yes, you should be extremely happy you are not a US citizen trying to do this. Your arrangement is extremely simple and easy to do legally. IRS taxation of Americans abroad is vexatious and obdurate. Don't even get me started about taxation of Americans owning shares in foreign corporations.
The IRS taxation of American's abroad is basically just filing a normal federal tax return and claiming a $100k+ exemption on foreign earned income. It's very simple. The meme that the process is "vexatious and obdurate" seems most often propagated by those who have never done it.
You're forgetting FATCA, which is a hassle for anyone who needs a bank account in a foreign country to get paid.
Re: Working for US company remote from Germany as A German citizen
#15Yes, you should be extremely happy you are not a US citizen trying to do this. Your arrangement is extremely simple and easy to do legally. IRS taxation of Americans abroad is vexatious and obdurate. Don't even get me started about taxation of Americans owning shares in foreign corporations.
Aren't us US citizens the only people who get taxed regardless of where we live and work ( yes I know the first 130k is exempted, it's still outrageous).
Eritrea as well.
Re: Working for US company remote from Germany as A German citizen
#16Earlier quoted context omitted.
The IRS taxation of American's abroad is basically just filing a normal federal tax return and claiming a $100k+ exemption on foreign earned income. It's very simple. The meme that the process is "vexatious and obdurate" seems most often propagated by those who have never done it.
You're forgetting FATCA, which is a hassle for anyone who needs a bank account in a foreign country to get paid.
[deleted]
Re: Working for US company remote from Germany as A German citizen
#17Earlier quoted context omitted.
Aren't us US citizens the only people who get taxed regardless of where we live and work ( yes I know the first 130k is exempted, it's still outrageous).
Depends on how you define it. Australians can still be required to submit tax returns/pay taxes when living and earning money while overseas. The rule is "Australian resident for tax purposes", and even if you never set foot in the country for the whole year, you can still be a resident for tax purposes.
When moving to Europe from Australia I just filled out a small form basically saying "I won't be living here anymore" and have not had to look at an Australian tax form since.
Re: Working for US company remote from Germany as A German citizen
#18Yes and no. If the US company is not registered as an employer in Germany (basically, has a subsidiary in Germany), then you’re not an employee under the German law, which means that you have to work as a freelancer (self-employed, pay health insurance yourself, and so on), and the US company must thus be willing for you to work as a contractor instead of as an employee. At least that’s my understanding.
Yes, and given that you will work as a freelancer for just a single company long-term, you will have to pay into mandatory social insurances as you are "arbeitnehmerähnlich Beschäftigt" (Arbeitslosenversicherung, Rentenversicherung, Krankenversicherung). Also note that you will have to pay both parts of the social insurance contributions (employer- and eyployee part). Assuming you are above the "Beitragsbemessungsgrenze" (~85.000€/year income), this amounts easily to 2.000€/month in social contributions (some of those are partly tax-deductable and I advice to get a tax accountant).
If you want to avoid paying into the mandatory social insurance, you must meet certain criteria to be considered truly self-employed. One way to achieve this is to not make more than 5/6 of your yearly income through one customer.
Re: Working for US company remote from Germany as A German citizen
#19Earlier quoted context omitted.
yes but at least his taxes are paying for healthcare and other social services he wouldn't be able to access as an american.
No, they have to pay their own health insurance in Germany and deal with taxes themselves as a self-employed person. Additionally, most likely they have to foot in for pension and a couple of insurances to be on the safe side. Germany is €€€. I’d also recommend getting a Steuerberater. They’ll need it. Mistakes are expensive. And don’t spend any money in the first year. Second year taxation will be 3x the nominal rat…
As a german freelancer for >8years, I can confirm and highly recommend you stick to exactly this advice.
You will also have to check with the tax authority (Finanzamt) whether you can become a "Freiberufler" (all income taxed as personal income) or whether you need to register a business ("Gewerbetreibender"). Whether or not the Finanzamt accepts your status as a Freiberufler depends on different jurisdictions, there is no uniform decision making in place. Most will grant you the status if you have a university degree in Engineering (or Computer Science). If they decline it, I would recommend to create a limited liability company (GmbH, stay away from UG). In any case, get a tax accountant to assist with this.
Re: Working for US company remote from Germany as A German citizen
#20Earlier quoted context omitted.
Depends on how you define it. Australians can still be required to submit tax returns/pay taxes when living and earning money while overseas. The rule is "Australian resident for tax purposes", and even if you never set foot in the country for the whole year, you can still be a resident for tax purposes.
When moving to Europe from Australia I just filled out a small form basically saying "I won't be living here anymore" and have not had to look at an Australian tax form since.
It very much depends on your individual circumstances.
For instance, a friend had problems with this because he made the same declaration, but after returning to Australia some years later, the ATO had issues with his declaration. He ended up having to do tax returns for the years he was away.
The ATO provides some examples for their rules.
https://www.ato.gov.au/Individuals/coming-to-australia-or-go...