How do I work as a freelancer in Dubai

Tax 2009 for freelancers in UAE

Attention archive

This answer is dated December 17, 2009 and may be out of date. Ask your current question now and get a legally binding answer from a lawyer.

Now ask a new question

Dear questioner,

I will be happy to answer your questions as part of an initial consultation, taking into account your commitment and the requirements of this platform.

I would like to point out that the following information can only be used as an initial reference under tax law and cannot replace on-site advice. I have my office near Frankfurt, so that you can speak to me directly if necessary.

I explain:

1. A new double taxation agreement with the UAE has been in force since January 1st, 2009. As a result, the ATE no longer works, this regulation only applies to activities with countries without an agreement. You also write yourself that you are not an employee.

The regulation in the new agreement provides that if the residence is retained in Germany, the income generated by natural persons in the UAE is taxable in Germany. In order to avoid double taxation, the rule is that the income tax paid there is offset. So you have to pay the German income tax, I am assuming that you do not pay any taxes there and therefore have nothing to offset.

2. Yes, you have to declare your income here in Germany. You can, however, also include business expenses or business expenses & lpar; double budget, travel expenses, etc. & rpar; assert.

3. An advance payment will only be determined and determined if the tax office is aware of your income. If you have this done by a tax advisor or lawyer, you should state the income minus the expenses and then only state the likely taxable income with these explanations.

4. Only with corporations are there opportunities to shield German taxation, but not for natural persons residing in Germany. There is only no taxation if you give up your place of residence in Germany.

5. The trade tax law requires a domestic permanent establishment for a taxation right. You certainly do not have this, that there is no trade tax:

§ 2 GewStG tax subject

& lpar; 1 & rpar; 1 Every standing business operation is subject to trade tax insofar as it is operated in Germany. 2Under commercial enterprise is to be understood a commercial enterprise within the meaning of the income tax law. 3A commercial enterprise is operated in Germany if a permanent establishment is maintained for it in Germany or on a commercial ship registered in a domestic shipping register.


I hope I was able to give you a first overview and am available for any questions or further advice,

With best regards


Marlies Zerban
Lawyer
Tax advisor

Inquiry from the questioner19.12.2009 | 09:09

Dear Ms. Zerban,

Zi. 1: As far as I know, the DBA UAE has been initialed but not ratified: In this regard, I have found the following & lpar; as of November 2009 & rpar;:
"The Bavarian State Office for Taxes & lpar; Order of 09/28/2009 & rpar; as well as the Oberfinanzdirektion Münster & lpar; Brief information from 09/30/2009 & rpar; have now announced that, based on the current state of knowledge, it is unlikely that a new DTA will be signed anytime soon. From 01/01/2009, the relationship with the UAE can therefore be assumed to have no agreement. ”So the DBA UAE is not yet in force.

Zi. 4: My & lpar; more theoretical & rpar; The question was actually whether the income from a "freelancer-engineer" activity could be treated tax-free in Germany with reference to a DBA UAE if the DBA did that so & lpar; ie without crediting procedures & rpar; would regulate? What if UAE introduced income tax? Without a DTA / crediting procedure, would I have to pay tax in both countries?
In short: is a DBA on "Freelancer" & lpar; without having a permanent establishment I fixed business orientation in its own right in Dubai & rpar; applicable at all?
From room 1 I take the answer 'YES' from room 4 but as "NO". Where is the truth?
Yours sincerely

Answer to the question from the lawyer20.12.2009 | 17:08

Dear questioner,

I am happy to answer your request here:


Re. 4: My & lpar; more theoretical & rpar; The question was actually whether the income from a "freelancer-engineer" activity could be treated tax-free in Germany with reference to a DBA UAE if the DBA did this so & lpar; ie without crediting procedures & rpar; would regulate?

Double taxation agreements are intended to prevent double taxation. If the agreement is renegotiated again before it comes into force due to the new political circumstances and this income from freelance work remains tax-free in Germany, no crediting procedure is required. Should the "exemption method" be reintroduced, the tax exemption in Germany will remain, the income from the UAE may then be taken into account in Germany in the tax rate & lpar; progression reservation & rpar ;.

What if UAE introduced income tax? Without a DTA / crediting procedure, would I have to pay tax in both countries?

Exactly, if there is no imputation rule & lpar; or the regulation of the exemption in one of the two countries & rpar; then there is double taxation. When determining the income taxable in Germany, operating expenses can be deducted as if you were working in Germany & lpar; travel expenses, double housekeeping & rpar ;.

In short: is a DBA on "Freelancer" & lpar; without having a permanent establishment I fixed business orientation in its own right in Dubai & rpar; applicable at all?

Ultimately, that always depends on the precise formulation of the DBA. There is a model convention of the OECD, but this does not count as a "standard rule".

If you keep your place of residence in Germany - without a double taxation agreement - the "natural person" is taxed here in Germany


Yours sincerely


Marlies Zerban
Lawyer
Tax advisor