Taxing times for DHL Air UK LEJ based pilots.
 

It seems the latest Double Taxation agreement between Germany and the UK will now see any LEJ based pilots subject to German income tax as opposed to the much cheaper alternative of maintaining P.A.Y.E in the UK. Combined with poor £-E exchange rates putting the squeeze on this sizeable pay cut will be very difficult for many to swallow.

The following could be useful:

HMRC Double Taxation Agreements

And:

Double Taxation Agreement between UK and Germany

Yep. Things look bad.

Does any one on here have any understanding on how the tax system works in Germany.

Yes, and the answer is you need to find a good german accountant. You may be pleasantly surprised what you can claim for e.g. double household, travel expenses etc. If you are a family man it makes quite a difference too. Best of luck.

There are excellent software packages available via Amazon, German bookshops and software retailers. AFAIK they are all in German but for the cost of a few beers (ok probably quite a few beers) you should be able to find someone willing to help you with the basics at least. Google "Software Steuererklärung".

As Lederhosen says there are many ways to get money back from the German taxman and most of the software programs show you a running total at the bottom of the page which makes it almost fun! How much you can claw back obviously depends on your circumstances but can easily come to several thousand euros.

KT

Thanks for the info guys.

You may find this site of help to get a rough idea of how much you will take home after tax - I tried it before I went onto a German contract & it's pretty much spot on (use the WAGE calculator)

German Income Tax Calculator :: german tax cosultants :: SH+C

- and this one will help you to find out what tax class you are, to help with the above.

How to determine your tax class - Germany

So who from the current DHL Air pilots can explain the new situation ?

Before : DHL Air , english company , english registerd aircrafts , deducted "english" tax and transfered the net salary in pounds to the pilots.

Now : DHL Air , still english company , still english registerd aircrafts , deducts german tax and transfers the net salary in euros to the Leipzig based pilots ?

So far the Germans did not want any tax from the pilots being based in Leipzig because they working for an english company on english registerd aircrafts and they stay maybe 3-4 days a month in Leipzig.

Can somebody explain pls ?

Thx

Ask the easyjet pilots who had the same problem a couple years ago.

I think this effects those that are resident in Germany. My very basic understanding is if you don't live in Germany you continue the way you have been going.

Denti ...
Don't know any German Easyjet pilots to ask ; what did happen to them ?

...Not in Germany, but France.

I'm not an easyjet pilot so i can't comment in depth, and as far as i know they have by now german contracts, not english ones anymore.

German taxation rules change constantly and around 2 or 3 years ago they changed the taxation of workers, like pilots, that have a base in germany so that they are taxed in germany. As far as i know the result was that easyjet pilots had to pay taxes retroactively which amounted to quite a lot of money and a severe pay cut.

There was some discussion about the topic in here as well back then, try to find them or some easyjet pilots as i know some of them are active on pprune.

Lets see if DHL Air changes their contracts now for new joiners or their aircrafts will be staying on the ground because i can't see them easily replacing all their leaving pilots with this new rules. At least not with experienced ones .

Leipzig Tax
 

My understanding is that tax liability is determined from where you are resident, while National Insurance Liability is determined from where you do productive (value added )work.

As many EMA based crews and all Leipzig based crews effectively start their productive work in Leipzig, the liability for German National Insurance contributions could possibly apply to all DHL pilots irrespective of notional base.

Being positioned from an East Midlands Base as a passenger to start productive work in Germany means in effect you are working from Germany and this implies a National Insurance Liability in Germany and not the UK.

Dead heading home again at the end of the week as opposed to operating an aircraft home again indicates that the real work is being done from Germany.

Might be a good time to check roster patterns and evaluate were you do most of your work from and explore how large this National Insurance Liabilty could be.

Also...
 

Leipzig isn't looking too enticing as a base now, especially for anyone who was thinking of commuting from the UK. It looks as though Ryanair have stopped their scheduled service from Stansted to Altenburg (Leipzig 'south') and scaled back their East Mids to Berlin flights. Commuting could get seriously expensive now :-(

ETR

That would be one bizarre circumstance, living in the uk working for a uk company paying tax in the uk and then having to pay NI in Germany. What will happen when the Chancelor combines tax and NI in the uk into one easy to follow tax regimen.

Taxed in UK, living in Germany.
 

Thanks BFF.