What current presence does the University of Oxford have in Germany?
The University has formed a gGmbH, “Oxford in Berlin”, or “OiB” in Germany. This is a charitable entity which has been set up to apply for EU grants from a European base. This entity will operate from offices in Berlin and is a wholly owned subsidiary of the University. It has been granted charitable status and consequently careful management is needed in order to not jeopardise that status. As the University already has an entity in Germany, wherever possible we should look to use it to prevent creating further reporting requirements in Germany.
What is the University’s risk?
Individuals who are employed by the University and working in Germany create a number of possible issues for the University. These include (but are not limited to) creating a permanent establishment (a "PE") of the University in Germany, creating a withholding requirement for tax or social security, or creating additional employment rights for the individual. It is important that guidance is sought before any significant (in excess of 60 days) travel to Germany is undertaken, as it is possible to minimise and address all of these risks easily.
What constitutes a PE in Germany?
There are a number of ways an individual can create a PE; for example an individual signing contracts on behalf of the University in Germany, or an individual having a fixed place of work (including a home office) in Germany. Individuals who are in Germany solely undertaking research can be exempt from these rules, so it is possible to have individuals working in Germany without creating a PE.
EU posted workers’ directive
When individuals are posted to work outside of their home country temporarily within the EU, employers must determine whether there are any additional employment rights, registration obligations, or payments due to the individual (amongst other considerations). This is of relevance in Germany, and the University may need to take action before an individual starts performing duties in Germany.
What is my income tax position?
Individuals who work for the University and who visit Germany may become taxable in Germany, but only in certain circumstances. It is possible to plan your time in Germany to avoid creating a tax liability for you and the University in Germany.
There are two articles in the UK/Germany double tax treaty which allow individuals to work in Germany without creating an income tax liability in Germany. These are as follows:
- If the individual is in Germany for research or teaching
- If the individual is a “short term” traveller to Germany
The criteria for these are as follows:
- “Research or teaching”
Individuals who are in Germany for a period of up to 2 years for the “purposes of teaching or engaging in research at a university, college, school, museum or other cultural or educational institution” will be exempt from income tax in Germany. These individuals will remain subject to UK income tax in full, and a number of conditions have to be fulfilled.
- “Short term” travellers to Germany
Individuals who visit Germany temporarily are exempt from income tax in Germany. It is important that the individual keeps records of the number of days they spend in Germany (for example boarding passes for flights to Germany) in case the German authorities challenge the exemption.
To be eligible for this exemption, individuals must meet three criteria:
- be in Germany for fewer than 183 days in a rolling twelve month period starting or ending in the fiscal year concerned
- be paid by (or on behalf of) a non-German employer * (assuming you remain employed by the University of Oxford in the UK, you will meet this requirement)
- be employed by a non-German resident employer
* It is important to note that it is possible to be deemed to be employed by a German employer, even if you remain legally employed by the University of Oxford.
If you meet either of the two exemptions, you may still be subject to other requirements in Germany, for example social security or income tax on non-University income.
If you do not fall into either of these two categories, you will become subject to German income tax and need to take further advice. It is likely that you will be seconded to the gGmbH, in order to avoid creating additional corporate filing requirements for the University in Germany. The ability to be seconded to OiB will depend on whether your reason for being in Germany is aligned with the purposes of OiB.
What if I am a director?
Directors of German entities are taxable on their income in Germany; they are not able to take advantage of the exemptions referenced above.
Will I still be paid in GBP?
If you meet either of the two above exemptions, you will remain on the UK payroll, subject to UK income tax and paid in GBP. Your PAYE withholding will not be impacted.
If you do not meet either of the above two exemptions, you will become taxable in Germany from day one of working in Germany. You may be seconded to OiB, but it is expected that you would to remain on the UK payroll, and paid in GBP.
What is my social security position?
This depends on your personal contribution history, but as a rule of thumb, individuals who are in the UK social security system and are in Germany temporarily, can remain in the UK system (paying national insurance contributions) for – in the first instance, up to two years, but ultimately for up to 6 years. You will need to apply to HMRC for an A1 in order to remain in the UK social security system. Please note that this advice is subject to change following Brexit.
Do I need a work permit or visa?
Having the right to work wherever you are working is crucial as failure to comply with a country’s rules can have serious personal consequences. Whether or not you need a visa or work permit to work in Germany will depend upon your nationality, what passports you hold, and what you will be doing when you are in Germany. It is recommended that additional advice is sought based on your personal circumstances.
Can I remain in USS?
If you are employed in the UK but working in Germany, then you are not eligible to be a member of USS, unless you are on secondment to OiB. If, this is the case, then you may be able to be a member of USS providing that contributions are maintained by the University.
If you work in both the UK and the EU then further advice is available here:
USS guidance on working overseas
USS guidance on taking a leave of absence
Am I covered by the University’s insurance?
The University will provide insurance cover if you are working overseas with the University in accordance with local laws and University policy. Please contact the Insurance team at firstname.lastname@example.org.
What help can I expect to receive from the University?
The University is committed to world class research, and not only understands that this involves overseas working, but actively encourages it where it benefits both the University and the individual.
Where can I go to for further advice?
The information provided here is intended to give a high level overview of the main considerations individuals should review, but detailed advice must be obtained via the proper processes before any work is undertaken overseas.