If you live overseas and operate a business, you’ll probably need to register your business in your host country and pay host nation taxes. This process is one that I’ve recently started, so I thought I’d share it with you here on MilliGFunk.com.
In order to legally operate as a freelance marketing consultant and content creator while stationed overseas with my husband’s Army job, I must register as a Home-Based Business (HBB) through our local Army installation. In order to complete the HBB application, I have to register my business with the German government.
A Trip to the German Courthouse
The first step in the process was to go to my town’s Rathaus (court house, basically) to register my business with the town’s Bürgerbüro or community office. The German employee in the business registration office spoke some English, and I speak a very small amount of conversational (not business) German.
Thankfully, the process was pretty straightforward: We talked about what kind of work I want to do in Germany, and he filled out some digital forms on his computer. Once complete, he printed them out, reviewed them with me, and asked me to sign them.
I then paid a €25 business registration fee and went on my way.
From start to finish (not counting wait time to see the registrar), the entire process took less than an hour.
Will I Pay German Taxes?
Part of the registration process with my Bürgerbüro was a discussion about whether I’d need to pay German taxes. While there were several variables at play, the determining factor for my business is that it will be based online. Because it will be based online, it’s in competition with German business that offer similar services. For that reason, I was told that was not — as I’d hoped to be — exempt from paying German taxes.
“Wait 2-3 weeks”, the registrar told me, “and a letter will arrive in the mail about your taxes. Fill that out and return it to the county tax office,” the registrar told me.
A few weeks later, an envelope was delivered to my door by the Duestche Post (German postal service). Instead of the “letter” I expected to receive, the envelope held a nine-pages of forms and four pages of cover letter — entirely in German — that I was to fill out and return to the county tax office within about two weeks.
The on-post HBB office was not allowed to help me fill out the forms. They were, however, able to email me a set of very similar forms that they’d filled in with a fake business’s information. This was hugely helpful — as was my husband’s German language proficiency. He’s not fluent, but he was definitely able to help me navigate things.
In Germany, if a business earns less than a certain amount of money annually, the business is not required to pay income taxes. Hopefully once my business is registered and operational, I’ll earn less than that threshold so that I don’t have to navigate tax payment. Still, though, my business is required to be on file with the German tax office.
A Trip to the German Tax Office
Once the nine pages of tax forms were completed, I drove to the German equivalent of our county seat; a town about 20 minutes away. I took my tax papers directly to the Finanzamt, or tax office, which was inside the county’s Hauptgebäude, or “Main Building”.
No one in the building spoke English, so I used my limited German, combined with pointing at the tax documents in my hand, to find the correct office. The women in the office reviewed my forms, told me, “alles gut”, and bid me farewell.
It turned out that registering my business in Germany was much simpler than figuring out how to set up an LLC in the U.S. as a military spouse stationed overseas. Now that I’m registered with the German government, I can file my paperwork on post to become a registered home-based business here. Fingers crossed that it all goes smoothly!