Life isn’t free (yet) so I’ve returned to the work-a-day world. Having a bit of income creates the need to move forward across the next set of stepping-stones – participating in the German taxation system.
The US tax system is set up to create the maximum amount of suction from those least able to afford it and the German tax system is no different. It is quite complex and intricate so as to close as many loopholes as possible for people who generally turn out to be the lowest paid workers in society. I find myself amongst those people.
The work I am doing is freelance. The best part about my first client is it is in English and I have nice people to work with. My supervisor is from England, and my colleagues are from New Zealand and Ireland. My supervisor’s boss is German and very fluent in English. So the environment is easy to adapt to.
I assume declaring one’s self as a freelancer has been abused by taxpayers in the past, and thus how one goes about proving that one is a freelancer is no easy task.
In the US, if someone does work that is as we say “under the table,” those earnings are not reported as income. In Hamburg that is called “black work” – Schwarzarbeit. I get the feeling the tax collectors feel that freelance work is just a notch above Schwarzarbeit so they keep an eye on you when you describe the nature of your earning money as freelancing.
I’ll meet soon with a person working for the Hamburg Handelskammer (Chamber of Commerce) to get some basic information. They provide up to 30 minutes of free time to you. A private tax professional charges €150 per hour or more, so an alternative is welcome.
I certainly don’t wish to be deceptive with my situation as it could cause me to be deported. I will be open and honest with the authorities even though I understand that as in the US, when it comes to paying taxes it’s a game of do you want to see how much you can pay, or how little. And when you ask questions, the officials might be reluctant to answer with tax saving advice, versus the paid tax advisor whose job it is to do exactly that.
Like all the other stepping-stones Steffi and I have walked across together, I know that ultimately we’ll get it all sorted out.
Ironically, I imagine that at the end of this tax year (2014) we’ll find that we owe no income tax, although some other tax may be owed.