Menu
Expat.com

Advice - Employed in the UK and working in Germany

Last activity 02 March 2021 by JohannesM

Post new topic

Frenchy101

Hello everyone,

I was hoping to get advice on my situation.

French citizen with Permanent Residency in the UK, I am currently living and working in London.

My SO has recently moved to Berlin and I'm debating to do the same. I have a full remote job offer for a Berlin company on the way but I realize that net net I'm losing A LOT on my salary if I move to Germany full time. The raise I would need to get the same net wage is far-fetched. This company can employ out of an office

An idea I'd welcome your thoughts on:
I was thinking to accept the remote offer, be employed by the company from their UK office and spend long periods of time in Berlin (6 weeks on/off). Being French I have right to free movement and I can stay there for up to two months no questions asked. Seeing as me and my SO travel both a lot we thought this might make more sense than me moving to Berlin full time with a German taxed salary.

I was wondering if anyone had made this decision in the past or if any of my assumptions above are wrong, I'd love your insights!

Thanks for the help!

beppi

Such international taxation issued are regulated in bilateral tax treaties.
I don't know the UK-Germany-treaty, but you should check it!
In general, such treaties give the taxation right to the country where the work is done, not where the money is coming from or paid out. That means you'll have to pay German taxes, if you live in Germany (in both jobs you mentioned) - PLUS: you will possibly have to submit both German and UK tax declarations (a complication I would rather avoid).
The idea of saving on taxes by such simple means is naive and will not work!

JohannesM

...Do not omit the effect of Brexit on the UK company employing you who will also have an increased tax burden as a 3rd country, since UK declined free movement of people and services. In all likelihood the old corporate tax tricks wont work anymore:
There was the tax praxis of overinflating subsiduary costs (ie Berlin) and shifting profits to head-office / tax „haven“ London).

Seeing how slow things dawn on some people with sandwiches crossing the border, it could be that their management realize effects only near June, they cannot overstate costs anymore, where even 100% subsidiary margin is not sufficient to offset the fat head-office anymore. The usual next step (UK cultural approach) is to „cut the legs“ = consolidate subsidiaries. Swedish management style is to reduce management overhead in subs, btw.

I guess you will be an employee, and with the UK consolidation style - For you personally it might mean staff reduction in Berlin or transfer to the left over subsidiary in another city. I‘d be careful if the business were not setup after 31 Dec 2020, where they recalc’ed fundamental profit/loss.

From accounting perspective this is the effect we can see on existing UK subsidiaries:

https://home.kpmg/us/en/home/insights/2 … tives.html

If you are a highly paid expert that can find an alternative job in Berlin quickly, I would say enjoy the ride and shovel their cream until they wake up.

Articles to help you in your expat project in Germany

  • Income tax in Germany
    Income tax in Germany

    When you begin to earn money in Germany, your income is subject to different kinds of deductions (i.e., retirement ...

  • Summer jobs in Germany
    Summer jobs in Germany

    The summer season in Germany begins in June and lasts until the end of August. These three months of the year ...

  • Elderly care in Germany
    Elderly care in Germany

    Germany may not have the sunshine and beaches of the Mediterranean or Southeast Asia, but it is among Europe's ...

  • Buying property in Frankfurt
    Buying property in Frankfurt

    Frankfurt has a very lively real estate market, and buying a house there is, without a doubt, a worthy long-term ...

  • Popular neighbourhoods in Frankfurt
    Popular neighbourhoods in Frankfurt

    Frankfurt is an international city and an important financial center in Europe, and each neighborhood has a story ...

  • Connecting to the internet in Germany
    Connecting to the internet in Germany

    Staying connected in Germany is easy thanks to its advanced telecommunications network and the widely available ...

  • Accommodation in Stuttgart
    Accommodation in Stuttgart

    Stuttgart, the capital city of the Baden-Württemberg region, is one of Germany's most diverse cities, ...

  • Things to do on weekdays in Frankfurt
    Things to do on weekdays in Frankfurt

    Frankfurt is a city of culture, fun, and many contrasts, which can be seen in the different neighborhoods and the ...

All of Germany's guide articles