Easyjet crews and Revised taxes in Germany?
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Easyjet crews and Revised taxes in Germany?
The gossip running around our crew room today was that the Easyjet crews in Germany now face local taxes, and the worst part is that its going to be post dated to the beginning of the year!
Can anyone else enlighten us as to the truth?
Is this the end of the road for the creative accounting that some of us have been able to benefit from?
Can anyone else enlighten us as to the truth?
Is this the end of the road for the creative accounting that some of us have been able to benefit from?
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I thought that everyone knew. Not only EJ crews, but all pilots operating from a German base have to pay German taxes. The only exception to my knowledge is PTI, they found a very fair deal with the authorities, fighting with the argument that although they are based in Germany, they never fly over it (but over the Atlantic). Still they pay 50% of German taxes (if they do not live there).
For most pilots this problem started already last year I thought...
Dani
For most pilots this problem started already last year I thought...
Dani
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No problem Hetfield,
I face a different set of issues I have been home for 10 days in the last 3 months so taxes are the least of my worries! Its the wife and kids I am scared of not the Finanzamt
I face a different set of issues I have been home for 10 days in the last 3 months so taxes are the least of my worries! Its the wife and kids I am scared of not the Finanzamt
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The new rules are true but should be no surprise for the people concerned!
As Non-residents in the UK the HMRC charges only taxes on the UK-part
of the income, which means domestic flights or a fixed 15min on each
flight to/from the UK.
The rest of income was therefore not taxed due Non-Residence status.
Germany in turn waived to tax the remaining part of income. Fine.
And exactly that "loophole" is now closed. But: No real surprise, errr ?
The untaxed part is to be taxed in Germany now and this means all german
crews get about the same (net) salary as the colleagues in the UK
(actual tax rates are very similar)
According the rule: "One company, one (net) pay!"
As Non-residents in the UK the HMRC charges only taxes on the UK-part
of the income, which means domestic flights or a fixed 15min on each
flight to/from the UK.
The rest of income was therefore not taxed due Non-Residence status.
Germany in turn waived to tax the remaining part of income. Fine.
And exactly that "loophole" is now closed. But: No real surprise, errr ?
The untaxed part is to be taxed in Germany now and this means all german
crews get about the same (net) salary as the colleagues in the UK
(actual tax rates are very similar)
According the rule: "One company, one (net) pay!"
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Anyone flying/working, wether you are contract or employed through an agency such as Brookfield or Rishworth, for easyJet, Ryanair, Veuling etc thinking that they can avoid paying tax in the country where they derive the majority of their income are just plain stupid or very badly advised.
It is the employees responsibility to contact the tax office in the area where they work. Don't ever get misled into thinking that the company you work for has any responsibility to pay the unpaid tax, they don't. Their resposibility extends only to NI contributions and PAYE if such a scheme exists. This ruling applies to all nationalities of the OECD, (effectively everywhere!) so if you are French working in Spain or Italian working in England or English working in Germany, the rules apply to you too.
Just because you become non-resident for tax purposes in one country does not excuse you from paying tax in the country where you work.
I would be very surprised if the authorities in Germany are only collecting the unpaid tax from the 1st of this year .They have the authority to collect tax for the previous seven years. They can also apply a penalty equal to 100% of the unpaid tax. Think Boris Becker and Michael Schumacher, both who narrowly avoided going to jail for just the same thing.
There is a very easy way to tell if you are liable for tax.
Ask yourself this simple question; am I happy for the tax authorities in the country where I work to know all about my financial arrangements?
If you answer NO, then you are breaking the law in that country.
My advice to you, if you are avoiding tax where you work, is to contact the tax office and come clean, before they apply the punitive fines when thay eventually find you.
It is the employees responsibility to contact the tax office in the area where they work. Don't ever get misled into thinking that the company you work for has any responsibility to pay the unpaid tax, they don't. Their resposibility extends only to NI contributions and PAYE if such a scheme exists. This ruling applies to all nationalities of the OECD, (effectively everywhere!) so if you are French working in Spain or Italian working in England or English working in Germany, the rules apply to you too.
Just because you become non-resident for tax purposes in one country does not excuse you from paying tax in the country where you work.
I would be very surprised if the authorities in Germany are only collecting the unpaid tax from the 1st of this year .They have the authority to collect tax for the previous seven years. They can also apply a penalty equal to 100% of the unpaid tax. Think Boris Becker and Michael Schumacher, both who narrowly avoided going to jail for just the same thing.
There is a very easy way to tell if you are liable for tax.
Ask yourself this simple question; am I happy for the tax authorities in the country where I work to know all about my financial arrangements?
If you answer NO, then you are breaking the law in that country.
My advice to you, if you are avoiding tax where you work, is to contact the tax office and come clean, before they apply the punitive fines when thay eventually find you.
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The loophole is actually NOT closed.
For those of you working for ezy, read the email we got concerning this again, again and again. Then you will see it! Be a bit creative guys!
Not saying you should take advantage of this, but nothing really changed....
This is a way for ezy managenment to be able to tell the authorities in Germany that "We have informed ALL our crew, not our problem anymore".
For those of you working for ezy, read the email we got concerning this again, again and again. Then you will see it! Be a bit creative guys!
Not saying you should take advantage of this, but nothing really changed....
This is a way for ezy managenment to be able to tell the authorities in Germany that "We have informed ALL our crew, not our problem anymore".
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Orangedriver, this memo simply reinforces the point that it is the employees' responsibility to inform the local tax office of their existence. The company are happy to allow confusion to reign in that they can often avoid paying NI contributions in the host country if they declare that the employee is only temporarily assingned to a base away from home.
Whatever you have read here or been told in the bar, you MUST pay tax in the country where you derive the majority of your income. I am afraid that there are no exceptions. Just learn to accept this fact and join the rest of the working population who pay their taxes. You are not exempt because you are employed through a contractor, Brookfield or any other. The rules apply to you as an individual.
Google 'tax avoidance' and read all the advice you can find. No matter how hard you look, you will not find a scenario where you, I mean all of you, are exempt from paying Income Tax. The amount might vary but the principle does not.
Whatever you have read here or been told in the bar, you MUST pay tax in the country where you derive the majority of your income. I am afraid that there are no exceptions. Just learn to accept this fact and join the rest of the working population who pay their taxes. You are not exempt because you are employed through a contractor, Brookfield or any other. The rules apply to you as an individual.
Google 'tax avoidance' and read all the advice you can find. No matter how hard you look, you will not find a scenario where you, I mean all of you, are exempt from paying Income Tax. The amount might vary but the principle does not.
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Here is what Net Jets supposively does. Pilots have British contract because the main headquarters(marketing, sales, PR) is in London. Non British resident pilots do not pay taxes in U.K. except for 5% cpt. 9% fo. for national insurance. Non British resident pilots then pay 25% non resident tax in Portugal (because that is were the operations center is). Your own tax authority may then also add some tax on top of that. That depends on the country.
Has anybody heard of this before? Sound familiar?
Just asking here because I know that there are many Germans in Net Jets.
Has anybody heard of this before? Sound familiar?
Just asking here because I know that there are many Germans in Net Jets.
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Quote....... People should be taxed where they actually have the center of their daily life, where their family is, where their children go to school, where they use public support for daily problems etc...............Quote
That is correct. But it does make no sense than at all, if I pay my tax in Germany, but my social security to UK sources!
If, than social security and taxes should go to the german sources. And that is, what EZY is probably not willing to do, because they have to pay more for the employer part than in the UK!
I guess, the attrition rate will go up again!
That is correct. But it does make no sense than at all, if I pay my tax in Germany, but my social security to UK sources!
If, than social security and taxes should go to the german sources. And that is, what EZY is probably not willing to do, because they have to pay more for the employer part than in the UK!
I guess, the attrition rate will go up again!
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However many ways you look at the tax situation, I would urge all of you to stop burying your heads in the sand and hoping this problem will go away, it won't.
As I said earlier;
There is a very easy way to tell if you are liable for tax.
Ask yourself this simple question; am I happy for the tax authorities in the country where I work to know all about my financial arrangements?
If you answer NO, then you are breaking the law in that country.
This rule applies wherever your company has its headquaters, wherever you come from, wherever your family live and wherever you work. It makes no difference. We are ALL obliged to pay tax, somewhere.
There are locally employed German crews, in Germany, who are under the false impression that they don't need to pay tax in Germany because easyjet and Ryanair have their headquaters outside Germany. Just how naive or blatantly stupid are these individuals? If you think you are being clever now, just wait until the fine hits you.
For German in the above paragraph, inseret your own nationality.
Once again, read the question above.
As I said earlier;
There is a very easy way to tell if you are liable for tax.
Ask yourself this simple question; am I happy for the tax authorities in the country where I work to know all about my financial arrangements?
If you answer NO, then you are breaking the law in that country.
This rule applies wherever your company has its headquaters, wherever you come from, wherever your family live and wherever you work. It makes no difference. We are ALL obliged to pay tax, somewhere.
There are locally employed German crews, in Germany, who are under the false impression that they don't need to pay tax in Germany because easyjet and Ryanair have their headquaters outside Germany. Just how naive or blatantly stupid are these individuals? If you think you are being clever now, just wait until the fine hits you.
For German in the above paragraph, inseret your own nationality.
Once again, read the question above.
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There are locally employed German crews, in Germany, who are under the false impression that they don't need to pay tax in Germany because easyjet and Ryanair have their headquaters outside Germany.
Do you think EZY will pay German tax over the profits it makes from the operation in Germany?
After all, the aircraft also spend the night in SXF/DTM and are therefore also 'resident' in Germany. Then there are things like the crew room and a ticket counter, all permanent things/objects which indicate EZY's presence in Germany.
Again, it's not so simple and straight forward as you say it is.
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Some of you seem to think that Double Taxation Treaties are a mechanism whereby you can, as an individual, avoid paying tax.
Double Taxation Treaties are conventions between two countries that aim to eliminate the double taxation of income or gains arising in one territory and paid to residents of another territory. They work by dividing the tax rights each country claims by its domestic laws over the same income and gains. Over 1,300 Double Taxation Conventions exist world-wide. The UK has one of the largest networks with more than 100.
Nowhere in these treaties is the principle that anyone is exempt from tax, simply that they will notr be taxed twice.
I have to tell you, yet again, that just because you are a pilot makes no difference to the fact that you have to pay tax. You can cite the case of mariners but even they pay tax, somehwere. The only difference is the amount you pay.
If you live in Berlin, fly out of SXF and work full time for ezy, then you are liable for tax in Germany. There is no way out of this fact. If you believe differently, be prepared for a shock and a big tax bill.
Double Taxation Treaties are conventions between two countries that aim to eliminate the double taxation of income or gains arising in one territory and paid to residents of another territory. They work by dividing the tax rights each country claims by its domestic laws over the same income and gains. Over 1,300 Double Taxation Conventions exist world-wide. The UK has one of the largest networks with more than 100.
Nowhere in these treaties is the principle that anyone is exempt from tax, simply that they will notr be taxed twice.
I have to tell you, yet again, that just because you are a pilot makes no difference to the fact that you have to pay tax. You can cite the case of mariners but even they pay tax, somehwere. The only difference is the amount you pay.
If you live in Berlin, fly out of SXF and work full time for ezy, then you are liable for tax in Germany. There is no way out of this fact. If you believe differently, be prepared for a shock and a big tax bill.
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SR71 and others, I know how the system works because some years ago I too thought I was being so very clever by avoiding paying tax in just the circumstances described.
I lived in one country, worked in another, paid in a third, offshore bank and emplyed by a company based in a fourth. After lengthy negotiations with the tax authorities, I am still paying them the tax I owe them.
Far easier to pay as you earn, believe me.
Just face the fact that you cannot avoid death and taxes. No-one is exempt, no-one.
I lived in one country, worked in another, paid in a third, offshore bank and emplyed by a company based in a fourth. After lengthy negotiations with the tax authorities, I am still paying them the tax I owe them.
Far easier to pay as you earn, believe me.
Just face the fact that you cannot avoid death and taxes. No-one is exempt, no-one.
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Some thoughts.
1. I have the impression that EZY knew about this from the beginning of this year or even before. They precisely timed the email from last week to ensure the crewing level during the summer peak. (3 month notice period)
2. As mentioned before this is a liability thing from easyJet to show the authorities that they HAVE informed their crew.
3. easyJet has got the German local contracts ready on the shelves and is trying to make things as complicated as possible to then offer us THE solution: i.e. a local contract. Sign it, or we will report you to your local tax-authority.
Pessimistic, perhaps.
I have joined a German base this spring and STILL they offered me to do the so-called S690 without informing me about any tax-liabilities in Germany.
I still have some thinking-time untill my 183 days in Germany expire.
For those in the know:
The new regulations state that German will fully exempt you from taxing provided you pay full UK tax. Is there a way for non UK residents to pay full UK tax? Without claiming tax back in the the yearly return. I would rather deal with one tax authority alone and Pay-As-You-Earn in the UK.
Regards
1. I have the impression that EZY knew about this from the beginning of this year or even before. They precisely timed the email from last week to ensure the crewing level during the summer peak. (3 month notice period)
2. As mentioned before this is a liability thing from easyJet to show the authorities that they HAVE informed their crew.
3. easyJet has got the German local contracts ready on the shelves and is trying to make things as complicated as possible to then offer us THE solution: i.e. a local contract. Sign it, or we will report you to your local tax-authority.
Pessimistic, perhaps.
I have joined a German base this spring and STILL they offered me to do the so-called S690 without informing me about any tax-liabilities in Germany.
I still have some thinking-time untill my 183 days in Germany expire.
For those in the know:
The new regulations state that German will fully exempt you from taxing provided you pay full UK tax. Is there a way for non UK residents to pay full UK tax? Without claiming tax back in the the yearly return. I would rather deal with one tax authority alone and Pay-As-You-Earn in the UK.
Regards
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OpenDes, there is very little leeway allowed in choosing where to pay your tax. If you are English, working in Berlin (I guess) and being paid in euros to a bank in Germany, or even elsewhere in the world, you are obliged to pay taxes in the country where you 'derive the majority of your income'.
If you have been assessed as non-resident by the UK taxman then you should contact the local Finanzamt in Berlin and arrange to fill in a tax return there. Most, if not all, Germans employ a Tax accountant, who can work on a percentage or a fixed fee. They will work on your behalf to reduce your liability as much as is possible and in Germany, that can amount to quite a hefty refund each year.
You can claim some refund against your travel to work, your clothing, a room in your home as an office, all the equipment needed there such as fax, printer, computer, laptop, PDA etc. You can claim for things such as sunglasses, gloves, winter hat, all sorts of things. If you have a home in UK you will be allowed an allowance to maintain and visit that. However, you will still pay around 25% of your income in tax.
Talk to a tax accountant, (steurberater, in the phone book) and take the advice they give you. They will most certainly not advise you to stick your head even further in the sand and hope it will all go away. It won't.
If you have been assessed as non-resident by the UK taxman then you should contact the local Finanzamt in Berlin and arrange to fill in a tax return there. Most, if not all, Germans employ a Tax accountant, who can work on a percentage or a fixed fee. They will work on your behalf to reduce your liability as much as is possible and in Germany, that can amount to quite a hefty refund each year.
You can claim some refund against your travel to work, your clothing, a room in your home as an office, all the equipment needed there such as fax, printer, computer, laptop, PDA etc. You can claim for things such as sunglasses, gloves, winter hat, all sorts of things. If you have a home in UK you will be allowed an allowance to maintain and visit that. However, you will still pay around 25% of your income in tax.
Talk to a tax accountant, (steurberater, in the phone book) and take the advice they give you. They will most certainly not advise you to stick your head even further in the sand and hope it will all go away. It won't.
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You can claim some refund against your travel to work, your clothing, a room in your home as an office, all the equipment needed there such as fax, printer, computer, laptop, PDA etc. You can claim for things such as sunglasses, gloves, winter hat, all sorts of things. If you have a home in UK you will be allowed an allowance to maintain and visit that. However, you will still pay around 25% of your income in tax.
For DTM/SXF tax infos, there are enough german pilots with experience of tax advisors, better than looking into the phonebook.
Experience in aviation tax issues, is what counts.
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"If you believe differently, be prepared for a shock and a big tax bill."
Hi rubik
See you your point. As of 2007, yes they will definetely enforce this, and people will be up for a rude awakening if they think different.
As far as going back to as far as 2004 (opening of the mainland bases) is concerned, no sweat !!
People had been in contact with their Finanzamt and the official tax return showed a zero balance with the german IR-services. As said before, it is just as of this year that the hole was plugged.
As Rubik and the others correctly said: The taxman will always win; even if heīs wrong (i.e. shoot first and then ask questions)
As far as German taxes are concerned, at least the tax rates are just about equal to the UK. People in other countries are even worse off. Germany/Switzerland for example. Pilots that used to fly for Germanwings/LH used to pay their taxes in Switzerland (domicile). Some of them as little as 10pc. Now they went up by factor 3 .... Thatīs what I call getting fu'*&%/&% !!! (So, yes .. it could be worse)
Btw, the change of this german tax clause was discussed in the Swiss government in October 2006. So, the UK and definetely easy have been knowing about this at least since 01/2007.
Did easy care: NO; Do they care now: NO. Thatīs why they sent a couple of gofers yesterday to the meeting in SXF. They didnīt have a clue and were just send to take the heat. Where was the "real management" (propably out on the golf course blowing their fuel saving bonus) ??
Anyways, guess we need to give it a couple of days, then look at the situation carefully, get a descent tax consultant and take it from there. The last thing we need now is everybody calling its Finanzamt individually as the the whole thing will perpetuate itself.
Cheerio
Hi rubik
See you your point. As of 2007, yes they will definetely enforce this, and people will be up for a rude awakening if they think different.
As far as going back to as far as 2004 (opening of the mainland bases) is concerned, no sweat !!
People had been in contact with their Finanzamt and the official tax return showed a zero balance with the german IR-services. As said before, it is just as of this year that the hole was plugged.
As Rubik and the others correctly said: The taxman will always win; even if heīs wrong (i.e. shoot first and then ask questions)
As far as German taxes are concerned, at least the tax rates are just about equal to the UK. People in other countries are even worse off. Germany/Switzerland for example. Pilots that used to fly for Germanwings/LH used to pay their taxes in Switzerland (domicile). Some of them as little as 10pc. Now they went up by factor 3 .... Thatīs what I call getting fu'*&%/&% !!! (So, yes .. it could be worse)
Btw, the change of this german tax clause was discussed in the Swiss government in October 2006. So, the UK and definetely easy have been knowing about this at least since 01/2007.
Did easy care: NO; Do they care now: NO. Thatīs why they sent a couple of gofers yesterday to the meeting in SXF. They didnīt have a clue and were just send to take the heat. Where was the "real management" (propably out on the golf course blowing their fuel saving bonus) ??
Anyways, guess we need to give it a couple of days, then look at the situation carefully, get a descent tax consultant and take it from there. The last thing we need now is everybody calling its Finanzamt individually as the the whole thing will perpetuate itself.
Cheerio
Last edited by Saabdriver; 2nd Aug 2007 at 18:45.