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Thinking Of Working Abroad For A Few Years - A Few Questions.....


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#1 luke85

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Posted 05 March 2012 - 09:35 PM

Hi everyone, long time lurker to HPC and I have read here almost daily for many years. I am looking for a bit of advice from people on here as I may have a job oppertunity to leave the country.

Basically I have been in my current job (a subsidary of rolls royce turbines) for 8 years, the only job I have had since leaving college with my HNC in electrical engineering. I have worked my way from shifts to be a team leader in charge of maintaining our most complicated machines on site. My salary is 31k before overtime and seen as I still live at home I have been hammering the overtime, working 6 days a week almost constantly, taking my salary to around £40k. I feel fed up with the long shifts and 1 day a week off, but at the same time I really want to move out and have my freedom.

Seen as house prices are still stubbornly high here, I refuse to blow my hard earned deposit on a house that I feel is still way over priced. I have been approached by the manufacturer of one of our mahines, with an offer of working for them. Basically it would be based in Germany where assembly and programming takes place, then 4-6 months comissioning at the customers site per project.

Pay would be around 80k euros per year.

If I take this up, would I still be paying UK income tax rates? I feel this country is going nowhere fast and it would be a good chance to build the deposit faster and get to see different parts of the world at the same time. How difficult is it to work for a foriegn company as far as taxes and accounts are concerned? Also it would mean learning at least the basics of the German language which I would be willing to put the time in and do.

Im sure many peope on here have done this and Im just looking for opinions really, is the grass always greener on the other side or should I take the chance while Im young? (26)

#2 libspero

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Posted 05 March 2012 - 09:53 PM

Hi everyone, long time lurker to HPC and I have read here almost daily for many years. I am looking for a bit of advice from people on here as I may have a job oppertunity to leave the country.

Basically I have been in my current job (a subsidary of rolls royce turbines) for 8 years, the only job I have had since leaving college with my HNC in electrical engineering. I have worked my way from shifts to be a team leader in charge of maintaining our most complicated machines on site. My salary is 31k before overtime and seen as I still live at home I have been hammering the overtime, working 6 days a week almost constantly, taking my salary to around £40k. I feel fed up with the long shifts and 1 day a week off, but at the same time I really want to move out and have my freedom.

Seen as house prices are still stubbornly high here, I refuse to blow my hard earned deposit on a house that I feel is still way over priced. I have been approached by the manufacturer of one of our mahines, with an offer of working for them. Basically it would be based in Germany where assembly and programming takes place, then 4-6 months comissioning at the customers site per project.

Pay would be around 80k euros per year.

If I take this up, would I still be paying UK income tax rates? I feel this country is going nowhere fast and it would be a good chance to build the deposit faster and get to see different parts of the world at the same time. How difficult is it to work for a foriegn company as far as taxes and accounts are concerned? Also it would mean learning at least the basics of the German language which I would be willing to put the time in and do.

Im sure many peope on here have done this and Im just looking for opinions really, is the grass always greener on the other side or should I take the chance while Im young? (26)


The grass isn't always greener, but it doesn't always almost double your salary either!

FFS man, unless you have serious friend/family ties get your frickin ass over there! Learn to see an opportunity when it head-hunts you :P

Or, more constructively:

Pros:
Double Salary (nearly)
Learn a new language
Change to live in another country for a few years
Plenty of new skills and experience to add to your CV

Cons:
You might hate it and want to move back.. you'd have to find another job.

In response to your question, no you shouldn't pay income tax over here.. you would pay income tax (and all other tax) in Germany. If they are a half decent company they will help you with this side of things anyway.

Good luck..

And I tell you we have learned from past mistakes.
Just as you cannot spend your way out of recession, you cannot, in a global economy, simply spend your way through recovery either.

(Gordon Brown, Labour Party Annual Conference, 29 September 1997)

So, housing affordability is better than it has ever been, but no-one can take advantage of this because they can't afford the houses. I see.
cybernoid - 7th August 2010

Gambling promises the poor what property promises the rich - something for nothing
George Bernard Shaw


#3 The Ayatollah Buggeri

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Posted 05 March 2012 - 10:05 PM

If you move to another EU country, you simply pay taxes into their system. It's only if you go outside the EU that I believe the tax implications can start to get complex.

The only thing I'm not sure about is the implications of not paying NI in the UK while you're gone. Does paying its equivalent in Germany mean that the stamps are paid on your behalf as far as the UK social security system is concerned? If not, I'm guessing that your state pension entitlement and entitlement to NHS treatment might be affected after a certain period of non-payments.

#4 The Masked Tulip

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Posted 05 March 2012 - 10:11 PM

It is very hard not to pay UK tax even if you do not set foot in the country for 12 months - even having a simple thing like a direct debit in the UK, a mobile phone contract, a sky or virgin subsicription, a magazine subscription can be used by HMRC as proof of you being UK domicile and hence a tax payer. I kid you not.
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#5 libspero

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Posted 05 March 2012 - 10:44 PM

It is very hard not to pay UK tax even if you do not set foot in the country for 12 months - even having a simple thing like a direct debit in the UK, a mobile phone contract, a sky or virgin subsicription, a magazine subscription can be used by HMRC as proof of you being UK domicile and hence a tax payer. I kid you not.


I'm not sure it's quite like that within Europe, particularly if you can prove that you are paying tax in another jurisdiction. I think they only get funny if they think you are trying to avoid paying tax altogether.

The company should be able to sort out the financial details for him TBH.

And I tell you we have learned from past mistakes.
Just as you cannot spend your way out of recession, you cannot, in a global economy, simply spend your way through recovery either.

(Gordon Brown, Labour Party Annual Conference, 29 September 1997)

So, housing affordability is better than it has ever been, but no-one can take advantage of this because they can't afford the houses. I see.
cybernoid - 7th August 2010

Gambling promises the poor what property promises the rich - something for nothing
George Bernard Shaw


#6 libspero

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Posted 06 March 2012 - 12:20 AM

FYI: Taxation in Germany

Income tax rate in 2010
No income tax is charged on the basic allowance, which is €8,004 for unmarried persons and €16,008 for jointly assessed married couples. Beyond this threshold, the marginal tax rate increases linearly from 14% to 24% for a taxable income of €13,469 (€26,938 for married couples). In the subsequent interval up to a taxable income of €52,881 (€105,762 for married couples), the marginal tax rate increases linearly from 24% to 42%. The last change of rates occurs at a taxable income of €250,730 (€501,460 for married couples) when the marginal tax rate jumps from 42% to 45%. The course of the marginal tax rate and the resulting average tax rate are depicted in the graph to the right.


On your expected salary you would pay about 32-33% tax (as far as Ii can tell) as an average over your entire earnings. They seem to have something called "solidarity surcharge" a bit like NI for us that kicks in at higher salaries and adds an extra 5.5% at the top end.

Overall you are looking at a similar overall tax burden to the UK I'd guess.. perhaps slightly less.


To follow up on TMT's point, you shouldn't need to worry:

Double taxation agreements
Germany has reached tax treaties with about 90 countries to avoid double taxation. These agreements fall under public international law and aim to avoid that one taxpayer is charged similar taxes more than once on the same income for the same period. The basic structure of the double taxation agreements which Germany has signed follows the "Model Tax Convention" drawn up by the OECD.


Edited by libspero, 06 March 2012 - 12:29 AM.

And I tell you we have learned from past mistakes.
Just as you cannot spend your way out of recession, you cannot, in a global economy, simply spend your way through recovery either.

(Gordon Brown, Labour Party Annual Conference, 29 September 1997)

So, housing affordability is better than it has ever been, but no-one can take advantage of this because they can't afford the houses. I see.
cybernoid - 7th August 2010

Gambling promises the poor what property promises the rich - something for nothing
George Bernard Shaw


#7 Kurt Barlow

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Posted 06 March 2012 - 12:34 AM

It is very hard not to pay UK tax even if you do not set foot in the country for 12 months - even having a simple thing like a direct debit in the UK, a mobile phone contract, a sky or virgin subsicription, a magazine subscription can be used by HMRC as proof of you being UK domicile and hence a tax payer. I kid you not.



Not so - this is a myth. As long as your presence in the Uk is less than 90 days in any tax year and are resident elsewhere then you are tax exempt for income purposes. If you have wifey and kids in UK maybe HMRC will look at it differently but a monthly subs to Country life ain't going to jeopardise your non dom status ;)

#8 porca misèria

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Posted 06 March 2012 - 03:18 AM

If you move to another EU country, you simply pay taxes into their system. It's only if you go outside the EU that I believe the tax implications can start to get complex.

The only thing I'm not sure about is the implications of not paying NI in the UK while you're gone. Does paying its equivalent in Germany mean that the stamps are paid on your behalf as far as the UK social security system is concerned? If not, I'm guessing that your state pension entitlement and entitlement to NHS treatment might be affected after a certain period of non-payments.

Yes, tax would be payable in Germany, not in the UK. I don't know how much, but you seem to be earning good money!

As for standard of living, it's high. Renting a flat is good there: I got a very nice flat in Nurnberg for the price of a pretty basic one anywhere in the UK (or a bedsit in London), but YMMV.

NI is optional. That is to say, as an expat in another EU country, you can contribute NI either here or there. At least, that was my experience working in Italy. But then I was employed by a UK company there: you might find it harder to pay UK NI if employed by a german company. I don't know.

#9 sukuinage

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Posted 06 March 2012 - 11:27 AM

The company should normally organise your contributions. You will pay income tax, solidarity tax (for the reunification), health insurance, care insurance, unemployment insurance and pension. Church tax is optional - be careful not to put down a religion unless you want to contribute. As a rough guess you would pay a bit over 40% of your salary in total.
Rent & house prices depend a great deal on where you are living. Some parts of Germany can be very expensive, you'd need to check it out in e.g. house search. Food & eating out are pretty reasonable here & you'd still have a good opportunity to save when you're commissioning as long as the conditions are good.
I haven't paid any UK NI contributions since I left. It is one thing to consider as you are only entitled to a German pension after you have contributed for 10 years or more. If you leave before then you have the option of requesting the pension contributions to be refunded (you'd probably then have to pay tax on them though).
With such a large salary increase I think you should give it a go here - just expect that you will have to go through lots of small hassles with finding accomodation, learning the language and also the German mentality.

#10 The Eagle

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Posted 06 March 2012 - 01:01 PM

I haven't paid any UK NI contributions since I left. It is one thing to consider as you are only entitled to a German pension after you have contributed for 10 years or more. If you leave before then you have the option of requesting the pension contributions to be refunded (you'd probably then have to pay tax on them though).

AFAIK, state pension entitlements are transferable within the EU, i.e. the contributions you paid in Germany can be transferred to the UK once you move back to the UK. In the end you will get the state pension of the EU country were you work and live the last 5 years before retirement, but all years spent in other EU countries working will be counted.

To the OP I would say go for it, it will be a great experience, it will enhance your CV, and you never know you might end up liking it so much that you stay permanently.

Edited by awake_eagle, 06 March 2012 - 01:03 PM.

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#11 thecrashingisles

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Posted 06 March 2012 - 01:06 PM

Go for it! I can't see any downsides and if it doesn't work out you can always come back more employable than when you left.

#12 oligotroph

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Posted 06 March 2012 - 02:15 PM

This sounds like a great opportunity, the one downside is that it sounds like you will have to do a lot of travelling with the on site work. That kind of work is well paid but (like doing lots of overtime) gets wearing after a while.

Jobs like that can be great to do for a year or 3, you can set yourself up financially and bang a few nice german girls. Something to bear in mind though is that if you decide you want to move back to the UK, thats much easier to do if you are 29 and still single than if you are 35 with a German family.

Don't fall into the trap of thinking that emigration should be a permanent decision or that if you return its a 'failure' in some way - it still a valuable experience to have on the CV.

Also 8 years is long enough with one company, statistically if you stay with the same employer for 10 years you will most likely stay with them until retirement or redundancy.

#13 TheBlueCat

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Posted 06 March 2012 - 03:10 PM

It is very hard not to pay UK tax even if you do not set foot in the country for 12 months - even having a simple thing like a direct debit in the UK, a mobile phone contract, a sky or virgin subsicription, a magazine subscription can be used by HMRC as proof of you being UK domicile and hence a tax payer. I kid you not.

Bullsh1t. If you live full time in another country - particularly one with a dual tax treaty with the UK - there is no issue at all. I know this for a fact as I've done it three times now and I know dozens of other people who have too. You will pay UK tax only on UK employment income (e.g. if your employer continues to pay you through UK payroll) and I think there's some special rules for rental income but that's it. The HMRC rules you're thinking of are about catching people who effectively live and work in the UK but try to avoid tax by spend just over 6 months in a low tax country like Monaco. Even if they tried to apply the same rules to someone living 10 months a year in Germany, which they don't, they'd get nothing or next to nothing as the person would already have paid the full rate of German tax and would be able to offset that against any UK requirement under the tax treaty. As an non-resident, you can even apply to not pay income tax at source on bank account interest although you'll still have to pay tax wherever it is you live of course (e.g. Canada for me).

#14 TheBlueCat

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Posted 06 March 2012 - 03:11 PM

Hi everyone, long time lurker to HPC and I have read here almost daily for many years. I am looking for a bit of advice from people on here as I may have a job oppertunity to leave the country.

Basically I have been in my current job (a subsidary of rolls royce turbines) for 8 years, the only job I have had since leaving college with my HNC in electrical engineering. I have worked my way from shifts to be a team leader in charge of maintaining our most complicated machines on site. My salary is 31k before overtime and seen as I still live at home I have been hammering the overtime, working 6 days a week almost constantly, taking my salary to around £40k. I feel fed up with the long shifts and 1 day a week off, but at the same time I really want to move out and have my freedom.

Seen as house prices are still stubbornly high here, I refuse to blow my hard earned deposit on a house that I feel is still way over priced. I have been approached by the manufacturer of one of our mahines, with an offer of working for them. Basically it would be based in Germany where assembly and programming takes place, then 4-6 months comissioning at the customers site per project.

Pay would be around 80k euros per year.

If I take this up, would I still be paying UK income tax rates? I feel this country is going nowhere fast and it would be a good chance to build the deposit faster and get to see different parts of the world at the same time. How difficult is it to work for a foriegn company as far as taxes and accounts are concerned? Also it would mean learning at least the basics of the German language which I would be willing to put the time in and do.

Im sure many peope on here have done this and Im just looking for opinions really, is the grass always greener on the other side or should I take the chance while Im young? (26)

Do it, the worst that can happen is that it doesn't work out and you'll have to come back. You'll regret it forever if you don't go having had the opportunity.

#15 TheBlueCat

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Posted 06 March 2012 - 03:21 PM

If I take this up, would I still be paying UK income tax rates?

Assuming you're paid in Germany and live there most of the time, then no. Having said that, German tax rates are broadly similar to the UK so you won't notice much difference anyway (aside from the pay rise of course). If you have UK savings, you can also get the bank to pay you interest without taking off basic rate tax if you fill in the right form - you'll still need to declare it and pay tax in Germany of course. More details here:

http://www.hmrc.gov....aqs_general.htm

The income tax point being covered here:

http://www.hmrc.gov....general.htm#2nr

Note this definition too:

Q3. In what circumstances would I become non-resident?
A3. Normally if you leave the UK to work abroad full-time, you will become not resident and not ordinarily resident in the UK if:

  • your absence and employment from the UK covers a complete tax year (that is 6 April to 5 April)
  • you spend less than 183 days in the UK during the tax year
  • your visits to the UK do not average 91 days or more a tax year over a maximum of four years
From 6 April 2008, days when you are in the UK at the end of the day, that is midnight, are normally counted as days spent in the UK.


Note also that you can apply for part year treatment as a non-resident so long as you're not expecting to come back (i.e. you don't get clobbered for UK tax just because you leave half way through the year).







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