# Germany tax question



## Nononymous (Jul 12, 2011)

So I have an entirely new sort of question.

I'm in Berlin for five months, then I return to Canada. I landed a work permit with my residency permit, and I have a series of freelance contracts. I assume that I will be paid a lump sum with no withholding at the end of each contract. 

Does anyone have any idea whether I might owe German taxes on this income? I will be in the country less than 183 days, so possibly I am not tax resident.

If yes, I will have to figure out how all this might work.

If no, the money goes into the bank and I declare it on my Canadian tax return next year.

I do have a German tax number, issued four years ago, that has never been "used" (at that time I had no work permit, and only worked remotely for my Canadian employer so I did not exist as far as the German tax system was concerned).

I'll wait for a bit before re-posting this to the Germany forum.

Thanks.


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## BBCWatcher (Dec 28, 2012)

Nononymous said:


> I'm in Berlin for five months, then I return to Canada. I landed a work permit with my residency permit, and I have a series of freelance contracts. I assume that I will be paid a lump sum with no withholding at the end of each contract. Does anyone have any idea whether I might owe German taxes on this income?


I'd say yes. It's German source income.



> I will be in the country less than 183 days, so possibly I am not tax resident.


That simply means you likely won't be taxed on worldwide income (less foreign taxes) by Germany. But you still have German source income and will pay German tax on that.



> If yes, I will have to figure out how all this might work.


Yes.



> If no, the money goes into the bank and I declare it on my Canadian tax return next year.


You'll still report it in Canada since you're tax resident in Canada, but you'll also report the German tax you paid on that income.



> I do have a German tax number, issued four years ago, that has never been "used" (at that time I had no work permit, and only worked remotely for my Canadian employer so I did not exist as far as the German tax system was concerned).


But that's helpful since it's one less thing to worry about.

The above information is the general case. It's remotely possible Canada and Germany have a tax treaty that says otherwise, so that's something to check.


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## Nononymous (Jul 12, 2011)

Oh this will be fun. I'll possibly repost to the Germany forum with a few more specifics (such as only being here five months and not needing any form of social insurance) once I've done a bit of research.


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## BBCWatcher (Dec 28, 2012)

Social insurance is usually a separate question and may be governed by another treaty between Canada and Germany (if it exists)....

....Ah, yes, there is one. A quick read suggests (to me) you'll participate in the German system for those 5 months you're working in Germany, but please read the information carefully.


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## Bevdeforges (Nov 16, 2007)

Income tax in Germany is normally the responsibility of the employer to withhold and remit to the tax authority. If your "employer" isn't withholding anything for taxes, then I expect you are being treated as a "contractor" or vendor rather than as an employee. (Which would explain how come you aren't being required to pay social insurances.)

Apparently, freelancers aren't required to pay into the social insurances in Germany. They are, however, required to set up a business (though I assume this refers to those maintaining an ongoing business presence). It's possible that your contracts are treating you like a foreign business.

This could get complicated - but I suspect the terms of your original visa may have some bearing on this.
Cheers,
Bev


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## Nononymous (Jul 12, 2011)

I am definitely a freelancer - I get the full sum at the end of each contract. 

The visa situation was quite remarkably liberal. I have "allowed to work" stamped on my residence permit. Any work, not just the freelance offer I had. But only for five months. Presumably I was a safe bet - we're here due to my wife's research sabbatical, she draws her salary from home, and we have return tickets booked.


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