If they are still a German tax resident , they are committing tax evasion .
§ 1 Abs. 1 KStG
If you do business in Germany you are evading taxes just by the fact of doing business. Everything and anything you make belongs to the government. It is an unfortunate loophole in the law that temporarily permits you to steal some of your profit back from the government where it rightfully belongs.
Yeah, this is sarcasm, but not really. The practical reality is that it simply makes no sense to incorporate in Germany. For example, the OP missed six months of opportunity just to please the bureaucracy and it's not even the end of it.
I'm sorry, but Germany is democratic country, and citizen of the country can choose by definition.
Leave your motherland because your government is crazy in one way or another? It is nonsense.
In reality, sometimes people need to do it (because it becomes too dangerous to stay), but it should not be this way. In any country.
Or change something. But yeah, I agree that leaving a country that you don't like is a good solution. I did that myself.
> There is no justification for tax evasion
The basics of philosophy behind taxation state exactly the opposite: it is an obligation of a business to evade as much tax as possible - as long as it is legal.
Tax evasion is always illegal.
Are you sure? I'm paying 48% as income tax, and then 21% as VAT and some additional taxes on gasoline, electricity, LPG, car, motorcycle, house and water. Additionally I'm forced to buy health insurance and cannot pay for medicine out of my pocket, insurance is only way to go.
If I invest my money (buy ETF, for example) I need to pay tax on imputed income over my open positions on the stock market (no matter, goes actions/ETFs/options up or down, I pay for open positions, not for my income from these positions).
If I have more than 57K€ in the bank (with 0.5% interest when official inflation rate is about 4% and real one is more like 10-12%) I need to pay tax on that money (not for the interest earned, but for sum on the account!).
Looks like it is not Ok to receive salary if it is a notch above poverty level, too.
Oh, and now I need to pay duties (on top of VAT) on each purchase in non-EU internet shop, no matter how cheap it is, and there is minimal duty 4€ per item. So, buying something small but unique on AliExpress is very costly too. And it is not protection of local brands — because almost nothing is produced here, especially for DIY hobbies (my case, but I'm sure everybody can name other group of goods which has good selection over aboard).
I've get free samples of some technical fabrics from USA (could you buy then in EU, by meter and as privet persond and not a business? Nope) and payed 14€ to the state: like 2€ VAT on FedEx shipping costs (goods are FREE!) and 12€ fix to process this transaction. And, no, it is not FedEx fee, it is local custom fee, it it the same for official national post service. Nicccccce.
Oh yes of course I meant that the only salary it is okay to receive is a small one. One shall never ever be permitted to feel wealthy.
OP missed six months of opportunities because he is an idiot, that has been scammed by a tax consultancy that is interested in his money.
He should have setup a UG, start the business and invest into building a GmbH.