Residence in F, main job in D, freelance side job in D.
May 12, 2014 | 45,00 EUR | answered by Wirtschaftsprüfer André Hintz
Dear Sir or Madam,
I am a German citizen with a permanent residence in France. My place of work is in Germany, where I am employed in public administration and taxed according to the cash-based accounting principle. The tax office responsible for me is located in Stuttgart (tax office of the place of work).
Now I would like to work part-time as a freelance dog trainer. Since I will be mobile, I do not need a fixed business premises or a dog training facility. Consultations will take place outdoors or at the customers' homes. I will be teaching in Germany. Now my questions:
a) Since I have a degree in education and understand the part-time activity as coaching, I would like to register this as a freelance activity. Is this possible? Which German tax office would be responsible in this case?
b) Or do I have to register the activity in France if it is freelance, even if the services are not provided there?
c) If I have to register a trade for the activity, according to the trade office I would need a German business premises (office and mailing address). However, this is unnecessary for my activity since I will not be carrying out my work there. Would a mere mailing address suffice in this case?
d) If I do need a business premises (office): my parents live in a condominium, where there is also an office room. Can my parents provide this to me for free or are they obliged to charge a customary rent? They are both retirees. I am not registered there.
Dear questioner,
I would like to answer your question within the scope of an initial consultation and based on your fee commitment, in accordance with the rules of the online portal. My response pertains to the situation you have presented and solely to the tax implications.
According to the French double taxation agreement, freelance activities are taxed where the personal work is carried out. However, there is a condition to be met, which is that the freelance activity should be carried out using a permanent establishment.
Therefore, if you have an office available as described in point d), the taxation will take place in Germany. If you do not have such an establishment available, France will tax the income.
Ultimately, whether you work freelance or not will be decided by the tax office. Dog trainer is not a listed profession in the Income Tax Act, so the following criteria must be met in order to decide:
- special professional qualification
- intellectual, creative, or idealistic services
- special trust from the service recipient
- free choice for your service
- personal activity
- managerial activity
- independent professional decisions
In my opinion, you could meet these requirements. Furthermore, professions like riding instructor or sports instructor are recognized as similar freelance professions. In addition, since you do not require a set up business operation, it is not considered a trade.
To start a freelance activity, a questionnaire must be sent to the tax office. The tax office will promptly decide whether to agree with this assessment.
Your parents can provide you with an office at any time, which is purely a private matter between you and your parents. It only becomes tax-relevant if your parents have the intention to make a profit from the rental or if they want to claim the expenses for the office. As long as this is not the case, there should be no issues.
I am available for further questions and assistance via email.
I hope my explanations have been helpful to you and remain
Yours sincerely,
André Hintz
Tax consultant
Steuerberatung@andrehintz.de
