IR35 has no country boundaries. If you are UK tax resident and are considering contracting in Germany
in theory the same rules apply but it is not the only consideration.
The UK authorities are changing the rules on tax residence. They are introducing a statutory test to determine whether individuals are resident in the UK for tax purposes. The UK tax rules around residence always provoke an interesting discussion, particularly with expatriate contractors.
The test brings some much needed certainty to this area however it is difficult to apply an objective standard to an area as inherently subjective as residence. On looking at the draft law and discussing real situations we are coming across a number of practical issues for those people with UK connections. It is important that people with UK connections are aware of the practical implications of the new rules especially if they use or continue to use a UK Company when contracting abroad.
Germany is a popular destination for UK contractors but working overseas requires some administrative adaptation over convenience. It is not the case, as many people think, that staying outside the UK for 183 days means that you cease to pay tax. You may still be obliged to pay tax on income received in the UK through a UK company or managed service company arrangement.
It is in regard to tax that much consideration need be given, and here our International Umbrella Services can be of considerable use.
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