TAX Mess - Advice needed

KTRIC

I've been working as a PAYE employee for my own company since late 2007. My client is based in Germany and paying my fee's to my Irish account.

I recently found out that my accountant has been less than truthful with me and bending the truth in his favour so he can continue doing my books. He advised me to do this and told me it was fine. It turns out that all the TAX and PRSI I paid since starting this role have been wrong and I should have been declaring my earnings to the German authorities.

My accountant hasn't been very helpfull and just argued with my German accountant over this mess rather than helping.

I've already sent a letter to the Revenue Commissioners regarding my taxes in 2007 but they still haven't gotten around to doing anything with it.

Can anyone offer any advice on what I can do to reclaim the TAX and PRSI ??

Thanks,
KTRIC

Legend100

Where is the job located if you don't mind me asking, Germany or ireland (as in PHYSICALLY where is it done from)

This is crucial as your residence will have to be determined, you'll need exact dates as to when you started also.

KTRIC

Legend100 wrote: »

Where is the job located if you don't mind me asking, Germany or ireland (as in PHYSICALLY where is it done from)

This is crucial as your residence will have to be determined, you'll need exact dates as to when you started also.

The job is physically done in Germany.

Mr. Incognito

Your Irish accountant has been bending the truth in his favour?

Firstly, fire this muppet. Immediately. Report him to the relevant bodies. Look for an accountant who is AITI qualified also and cross border tax issues are slightly more complicated than the average joe soap accountant may be used to.

If the job is located in Germany you will automatically have a charge to German tax regardless of residence status. You've already hired a German accountant to file your German return, excellent. I don't know how in hell the Irish accountant thought the German authorities would miss this. Your German employer is going to be filing year end reports detailing payments made to you as a foreign contractor and probably applying with-holding tax.

As your German income was remitted to Ireland it will also fall within the charge to Irish tax. As the income will be charged to tax in both juurisdictions a credit will be available here for the German tax paid. An effective rate calculation will be needed and you WILL ned professional help.

Let your German accountant clean up the German mess and hire an AITI qualified accountant in Ireland. It's not a huge mess really though the frustration must be a pain. If the Revenue do come after your for penalties I would consider suing your dodgy accountant for them.

KTRIC

Just found out that my account is supposedly CPA and MIATI certified.

Can someone recommend a trustworthy accountant that I can get to sort this mess out ?

Baby4

This post has been deleted.

KTRIC

Baby4 wrote: »

This post has been deleted.

Not in Ireland any more. Moved to Germany in late 2007.

Boom Boom

Hi Ktric

It appears from the letters you have posted your accountant is not tax qualified.

I have a quick question, Although you live in germany and the work is carried out in germany you say "I've been working as a PAYE employee for my own company since late 2007. My client is based in Germany and paying my fee's to my Irish account."

So you are a Director of a company registered in Ireland however your client is in germany is this right???

Because if that is the case you could be a resident in germany remitting income from Ireland

I dont want to confuse you any further but if you want PM me and i can give a name or two of Qaulified tax consultants, but they are in fairly large firms so it could cost a little bit just for advice.

Bren1609

Before we all jump to conclusions, take a look at the OP original question.

KTRIC wrote: »

I've been working as a PAYE employee for my own company since late 2007. My client is based in Germany and paying my fee's to my Irish account.

I recently found out that my accountant has been less than truthful with me and bending the truth in his favour so he can continue doing my books. He advised me to do this and told me it was fine. It turns out that all the TAX and PRSI I paid since starting this role have been wrong and I should have been declaring my earnings to the German authorities.

My accountant hasn't been very helpfull and just argued with my German accountant over this mess rather than helping.

I've already sent a letter to the Revenue Commissioners regarding my taxes in 2007 but they still haven't gotten around to doing anything with it.

Can anyone offer any advice on what I can do to reclaim the TAX and PRSI ??

Thanks,
KTRIC

The OP stated that he was an employee on PAYE working for an Irish resident company.

Keep in mind that the copany and it's directors/employees are two seperate entities even though the OP is the owner of the company, from a taxation point of view.

The first thing you need to establish is: Is the company an Iish resident company which it sounds like it is? If it is then the copmany pays Irish Corporation Tax @ 12.5% on it's profits.

From the OP/employees point of view, he is in receipt of an Irish salary from an Irish company and Irish tax is being deducted at source via PAYE. If the OP was resident in Ireland for more than 183 days in the relevant tax year (say 2007) and an Aggregate of 280 days over 2007 and preceding year then the OP is Irish resident and subject to Irish tax on all worldwide income.

The OP needs to determine exactly what the residency status is for both himself and his company. However, even if the OP is non resident in Ireland in 2008 he is still in receipt if an Irish salary and PAYE is deducted accordingly.
Ultimately the tax is going to be paid in the jurisdiction that has residency. Either way and AFAIK Ireland has a double tax treaty with Germany. Based on the info the OP provided it sounds to me as if it was correct to deduct Irish tax all along.

Mr. Incognito

The OP stated that he was an employee on PAYE working for an Irish resident company.

Keep in mind that the copany and it's directors/employees are two seperate entities even though the OP is the owner of the company, from a taxation point of view.

The first thing you need to establish is: Is the company an Iish resident company which it sounds like it is? If it is then the copmany pays Irish Corporation Tax @ 12.5% on it's profits.

From the OP/employees point of view, he is in receipt of an Irish salary from an Irish company and Irish tax is being deducted at source via PAYE. If the OP was resident in Ireland for more than 183 days in the relevant tax year (say 2007) and an Aggregate of 280 days over 2007 and preceding year then the OP is Irish resident and subject to Irish tax on all worldwide income.

The OP needs to determine exactly what the residency status is for both himself and his company. However, even if the OP is non resident in Ireland in 2008 he is still in receipt if an Irish salary and PAYE is deducted accordingly.
Ultimately the tax is going to be paid in the jurisdiction that has residency. Either way and AFAIK Ireland has a double tax treaty with Germany. Based on the info the OP provided it sounds to me as if it was correct to deduct Irish tax all along.

Bren,

What are you getting at here? He already stated that the PAYE / PRSI was paid, just that it was wrong.

As a proprietary director he's going to have to file a Form 11 anyway. Residency is not really the issue here. The issue is that he

a) Has not declared the earnings it looks like from the German source in Germany becase his accountant was an ignorant cowboy. There is no point guessing what his tax return is going to look like. He needs an Irish accountant to actually sit down and do it for him. It sounds like the Irish return should be straightforward anyway.

OP, ring around a few accountants and ensure they are AITI and ACCA qualified.

I'd do it myself for you just because I hate to see this sort of thing but my books are full right now.

What the hell is MIATA?

KTRIC

I've just found the CARB website, I think thats a good place to start.

mkdon05

MIATI = Member of the Accounting Technicians of Ireland.

If the Op's company is resident in Ireland and he does work in Germany, is it not a case of his Company Invoicing the Company in Germany and therefore his company receives the Payment. The salary paid to the OP being seperate althogether?
I do admit though, my international tax is not the strongest.

KTRIC

mkdon05 wrote: »

MIATI = Member of the Accounting Technicians of Ireland.

If the Op's company is resident in Ireland and he does work in Germany, is it not a case of his Company Invoicing the Company in Germany and therefore his company receives the Payment. The salary paid to the OP being seperate althogether?
I do admit though, my international tax is not the strongest.

So its not just a type of Mazda MX5

I've confirmed with my German accountant, who I believe over the Irish cowboy that I'm taxable on my earnings here.

Mr. Incognito

Some people have a right brass neck. How can people advertise these services without the relevant qualifications.

Mk- you could be right on that one. If he's a salaried employee I'm unsure how he would have to declare the German earnings of the company. Then again I'm no expert on German tax, maybe he's talking about filing a CT return in Germany. I'd defer to the German accountant on that one.

Hopefully he'll get a competent Irish properly qualified professional.

KTRIC

Mr. Incognito wrote: »

Hopefully he'll get a competent Irish properly qualified professional.

Thanks for the advice guys, I'm really lost at this point.

If anyone is kind enough to point me in the direction of a competent professional then when this is all finished I'll be happy to reward them

Bren1609

mkdon05 wrote: »

MIATI = Member of the Accounting Technicians of Ireland.

If the Op's company is resident in Ireland and he does work in Germany, is it not a case of his Company Invoicing the Company in Germany and therefore his company receives the Payment. The salary paid to the OP being seperate althogether?
I do admit though, my international tax is not the strongest.

Yes thats just what I was trying to explain in my post. Irish company invoices German company. German company pays Irish company into Irish bank account. Irish company pays Irish resident employee into an Irish bank account and deducts Irish PAYE. Irish company pays Irish tax on Irish profits.

KTRIC

Bren1609 wrote: »

Yes thats just what I was trying to explain in my post. Irish company invoices German company. German company pays Irish company into Irish bank account. Irish company pays Irish resident employee into an Irish bank account and deducts Irish PAYE. Irish company pays Irish tax on Irish profits.

Wrong, I'm a German resident.

mkdon05

In that case, my understanding would be that, you are liable to irish tax as the money was remitted to Ireland and you are domiciled here. You are liable to German tax as you are a German Resident. You then get a tax credit in Ireland for German Tax paid when you submit your Form 11 (Using effective tax rate)
Much As Mr. Incog said above.

Summary is:
You need to Submit a form 11 in Ireland (Having paid Irish Tax and Paye will reduce your overall liability)
You need to Get Zee Germans tax sorted there too.

Not much of a mess really! I've deffo seen worse!

Bren1609

KTRIC wrote: »

Wrong, I'm a German resident.

Are you sure? You may be living there as a resident but you may not be deemed resident from a tax point of view. The rule is, you are resident in Ireland if you are in the state for 183 days of the current year and an aggregate of 280 days in the current and preceeding year. Even if you were not a resident in 2008, you would still be deemed "ordinary resident and domiciled" in ireland and still liable to pay tax on your Irish Income i.e. salary from your Irish company.

I think your Irish accountant is correct.

mkdon05

Bren1609 wrote: »

I think your Irish accountant is correct.

From the info given, i'd be inclined to agree.(As in, he is dealing with the irish end of things)Although he probably should have advised you to seek the services of a German accountant to deal with the German end of things too.

Mr. Incognito

It's perfectly normal and possible to be resident in both jurisdictions you know

Wreck

I also think that, on what the op has said, his Irish accountant may well be correct. However there is no point in us speculating on it here, and I'm going to recommend a tax consultant as requested.

KTRIC

Thanks Wreak. My Irish accountant was speculating and this is the problem.

My German accountant tried to tidy this up with my Irish accountant and she told me she won't deal with him, essentially he was arguing with her over things that he didn't understand. I would bow to her knowledge over his any day.

Kingkong

Some of the larger accountancy firms have specialized departments to deal with foreign assisness may be worth looking into. I would also advise that your company be charged for these tax services as they would be tax deductible by the company. As you are a PAYE employee it is up to your company to work out those tax affairs.

swanvill

Sorry to hear about all the mess but I would advise you the best thing is to contact a firm of accountants, I would recommend Baker Tilly Ryan Glennon in Ranelagh 01- 496 5388. I used to work there and the Tax Partners are excellent. Call them, ask them for a free consultation to explain your circumstances and get them to quote you a price for the job.