Live in FR, main job in DE, part-time coaching online work from home.
April 12, 2022 | 40,00 EUR | answered by Steuerberater Bernd Thomas
Since 2018, I have been living in France and working full-time in Germany. I pay social security contributions (health insurance, nursing care insurance, pension insurance, unemployment insurance) in Germany and income tax in France. I file my tax return in France.
Starting in spring 2023, I would like to offer coaching services on a part-time basis. How does the combination of being an employee, having a main job (Germany, 40 hours per week, €3,500 gross per month), and having a part-time self-employment (coach/consultant, home-based work in France, mainly online, 10 hours per week, €500-€1,000 gross per month) work tax-wise?
a) Where should I register the part-time "coaching activity" (France or Germany)?
b) When would it be advisable to register? Right after completing the coaching training (end of 2022), later (once I have a few clients), or even earlier?
c) If I earn money from my part-time self-employment, do I have to pay additional social security contributions on this additional income, or are they already covered through my main job?
d) Is there an income limit for part-time self-employment (to avoid paying additional social security contributions)?
e) Do I need a separate bank account for part-time income and expenses?
f) Can I deduct ongoing expenses (e.g. office equipment, office supplies, website, advertising, mobile phone, internet, travel expenses) in my income tax return in France? Is there a monthly or yearly cost limit? Should the coaching office or my name be on the invoices?
Thank you in advance.
Best regards,
Carolina Santos
Dear Mrs. Santos,
I am happy to answer your inquiry based on the information provided in a preliminary consultation on frag-einen.com. The response is based on the information you have provided about the facts. Missing or incorrect information can affect the legal outcome. Details may not always be fully covered in a preliminary consultation and can be found in the sources mentioned. The response covers German tax law, for French tax law, a French tax advisor should be consulted.
a) Where should I register my part-time coaching activity (France or Germany)?
According to the Double Taxation Agreement (DBA), freelance activities are to be taxed at the place of exercise, provided that a regularly available permanent establishment is required for this purpose (Art. 12 DBA France (Income and Wealth), juris). Therefore, the state of residence or domicile according to the DBA is primarily relevant in this case.
b) When would be the right time to register? Right after completion of coaching training (end of 2022) or later (when I have a few clients) or even earlier?
Registration should be done at the beginning of the activity, which usually includes preparatory activities. This can be important to claim business expenses for tax deductions and potentially get refunds on input taxes.
c) If I earn money from my part-time self-employment, do I have to pay additional social security contributions on this additional income, or are they already covered through my main job?
As long as it is a self-employed activity, does not exceed the scope of a secondary job, and as long as it does not create its own obligations for pension insurance as a member of a regulated liberal profession or as a teacher, the activity can be carried out in Germany without social security contributions. You should inform your health insurance company accordingly. A different assessment may be necessary under French law, in which case you may contact the German Liaison Office for Health Insurance Abroad (DVKA) and again a French tax advisor or similar.
d) Is there an income limit for part-time self-employment (to avoid paying additional social security contributions)?
There is the reference amount in the area of social security. This serves as a criterion in addition to the number of hours worked and the economic importance, etc. Details should be coordinated with your health insurance.
e) Do I need a separate bank account for part-time income and expenses?
No.
f) Can I deduct ongoing costs (e.g. office furniture, office supplies, website, advertising, phone, internet, travel expenses) in the tax return (in the income tax return FR)? Is there a monthly or yearly cost limit? Should the coaching office or my name be on the invoices?
If you are taxed in France, it will be assessed according to French law which business expenses are deductible. However, costs incurred by the activity should generally be deductible.
Bernd Thomas
Tax Advisor
Information according to DL-InfoV: Tax advisor Dipl.-Kaufmann (FH) Bernd Thomas, Tax advisor, Franklinstraße 15, 30177 Hannover, Member of the Tax Advisors Chamber of Lower Saxony, Membership number 146580, Professional liability insurance with R+V Allgemeine Versicherung AG, Mittlerer Pfad 24, 70499 Stuttgart, Insurance sum: 250,000 euros for each individual claim; Annual maximum benefit: 1,000,000 euros (for all damages in an insurance year); The professional regulations apply, in particular the Tax Advisory Act (StBerG), Implementation Regulations for the Tax Advisory Act (DVStB), Professional Code (BOStB), Tax Advisor Fee Regulation (StBVV) (Regulations can be viewed at: https://www.berufsrecht-handbuch.de/, http://www.gesetze-im-internet.de/stberg, www.gesetze-im-internet.de/stbvv/), the professional title of tax advisor was awarded in the Federal Republic of Germany.
