Working for US company remote from Germany as A German citizen
Can i work remotely from Germany for US company.
I am German citizen.
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.
TK is fine, I used them.
the online tax filing via Elster can be done by yourself, yearly.
TK is trivial.
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…
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.
This is not exactly true in the german system. Social insurances are separate from taxes. For example I am a self-employed German, and I am exempted of paying into the government pension fund (as a result I am also not eligible for pension and have to make my own arrangements). Same for health insurance; while you cannot be legally exempted from it, you can be exempted from the government system ("gesetzliche Krankenversicherung") and pick a private health insurance company (which has its own advantages but also drawbacks).
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.
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...
As an American working abroad who is about to wire the IRS a ridiculous sum of my money earned while living and working in a home for a company that happens to not be in the US, I assure you the exemption you refer to (FEIE), which is CAPPED at that $107K, is insufficient. That is because it covers wage income only and has numerous other limitations, including complete ineligibility if taken in conjunction with the other weak avenue (FTC) to only mildly offset a policy that should not exist to begin with.
Retirement, foreign investment (which is local to me) such as company equity, home sales, etc gets taken away by a country to which I have no ties other than citizenship. The FTC/FEIE, which by the way you can’t combine and which allows only one selection per eight years, does not free you of this and leaves you still sending huge amounts of your earnings to the IRS pointlessly after paying taxes to where you actually live and work.
No other developed nation does this. The US’s extraordinary system of extraterritorial taxation severely harms me and 9 million Americans abroad. We are already paying taxes where we actually live and work. No one else but American citizens have to “send money home.” And forget about self employment - it’ll destroy you. Solely by virtue of your passport. Don’t even start me on FATCA, a horrific intrusion preventing many of us from getting bank accounts - for the same issue domestic politicians recently defeated (remember the outrage over Treasury wanting to inspect accounts with over a certain amount of money deposited? We actually live that).
In case it’s not obvious, I am an American living abroad balancing a career and financial plan with this horrid system. Definitely not someone who’s “never done it.” There are activist groups for this among other Americans dealing with this draconian nonsense, but we are up against the aforementioned - as well as, I’m sorry to say bluntly, poorly informed sentiments from people who actually have “never done it” - or for whom it was trivial, as you say, because they were lucky or young enough to have no serious financial obligations or concerns.
Never mind the fact that it’s wholly unnecessary and legally simply a relic of the Civil War, likely generates very little for IRS vs how much it costs, and continues only because the tax prep industry (eg TurboTax) has a strong lobby vs disempowered citizens writing to disinterested lawmakers. This is the only reason it still exists. Defending this ridiculous practice makes absolutely no sense if you don’t work for one of these companies.
The laws and regulations available in Germany makes it kind of bad to work as a contractor, it is also terrible for the company contracting you. The social insurance contribution you'll need to pay out of your pocket will be quite high and the list goes on.
It is too painful to be good. Other countries it is much easier to work as a contractor(such as Great Britain, Portugal etc), but Germany is definitely not in that group.
If working abroad is such a priority for you, you are probably better off getting a visa to work in the US and move there, or move to an EU country that is a bit more progressive in that regard.
I personally made the decision to not work as a contractor and got a job in a North American company that has an entity here to do payroll. That is becoming more common and even some companies such as Remote, do payroll for American companies, enabling them to hire people around the EU, not as a contractor, and this works quite well for folks who live in Germany.
Best of luck :-)