I would like to develop an Internet based subscription website where
people can subscribe to access exclusive content, I would charge for
this.

I am an Australian student studying while living in Germany and need
to know what taxes I would be required to pay and to whom; Australia
and / or Germany?
I would also like information regarding whether I would be required to
create a limited company (and where and how), or whether I could
operate such a website in my spare-time as a hobby, tax free.

Presume the website generates $4,000 profit per month.

Additionally, what would be the best method to save/invest
earnings from such a website.

Thank you very much.

---

Request for Question Clarification by till-ga on 06 Apr 2004 05:54 PDT

Could you please explain what exactly you expect for the last point:
"what would be the best method to save/invest earnings from such a website"
Investments are really a rather complicated matter. If you expect a
complete investment consulting I´d pass the question to one of my
colleauges.
I´ve found out the other information required.

Can you read german texts ? This would save the work of translation
the laws and regulations Ì´ve found for you.

till-ga

---

Clarification of Question by thanksmate-ga on 06 Apr 2004 08:51 PDT

Thank you doing this so fast.

Yes I understand German; have had +5 years of lessons, so no need to
worry about translating :-)

"what would be the best method to save/invest earnings from such a website"
by that I meant where would the best place be to deposit the funds,
which would be received bi-monthly via check in USD. For example,
would a regular German bank savings account or perhaps an off-shore
account be better as this would minimize tax?
(I do not have a bank account in USD)

I will answer your question in several parts.

a) "Gewerbeanmeldung"

Yes, you must pay taxes here in germany and you will have to go to
your local municipality and search the "Gewerbeamt" to get the
permission to work self-employed. What you have to get is called
"Gewerbeanmeldung" or sometimes "Gewerbeschein". It will cost a fee
(this will be about 20 Euro)
Please keep in mind that you can get punished here in germany if you
do not get the "Gewerbenameldung" before you start your business:

"Wann ist anzuzeigen? 
Die Anzeige ist gleichzeitig mit Beginn des Betriebes bzw. des
anmeldepflichtigen Ereignisses zu erstatten. Die Unterlassung der
Anzeige kann als Ordnungswidrigkeit mit einem Bußgeld bis zu 1000 EUR
nach der Gewerbeordnung und unter Umständen auch nach dem Gesetz zur
Bekämpfung der Schwarzarbeit mit Bußgeld bis zu 300.000 EUR geahndet
werden."
from:
( http://www.essen.de/Deutsch/Rathaus/Buergerservice/dienstleistungen/g_dl/GewerbeAnUmmeldung.htm#Gewerbeanzeige
)


b) Foreigner
As you are a non EU foreigner you will need a work permission as well:

"Ausländer
Ausländer mit Ausnahme der EU-Ausländer, die in eigener Person im
Inland eine gewerbliche Tätigkeit ausüben wollen, bedürfen einer
Aufenthaltserlaubnis der dafür zuständigen Ausländerbehörde, nach der
ihnen die Ausübung des betreffenden Gewerbes ausländerrechtlich
gestattet ist."
from:
( http://www.muenchen.de/Rathaus/lhm_alt/mde/referat/kvr/gewerbe/anzeigen/60426/index_m.html#Auslaender
)

So you will have to get this work permission before you got to the
"Gewerbeamt". Maybe the "Ausländerbehörde" will be in the same house
than the "Gewerbeamt" but this is different form towns to town here in
germany. But you will already know your "Ausländerbehörde" or you
local municipality will be able to help you to find out where they
are.

c) Tax

You will be contacted and hopefully informed by the "Finanzamt" how
much taxes you will have to pay and how the VAT stuff will be handled.
This is a complicated matter as it has to be decided by the bills
(inside EU, Germany, outside EU) you will write to your customers if
VAT will have to be paid.
You will however have to pay income tax anyway, no matter where you
cash the cheques.
I would really advice you to ask a tax expert ("Steuerberater") to
help you with the complex tax stuff: I´m self employed for more than
ten years and still the tax laws here in germany are so complex that I
neeed an expert to help me.
And paying not enough taxes wil be punished as well: sp spend ther
money and find a "Steuerberater" in your town.

d) Bank

My dear colleaugue politicalguru-ga mentioned that the best bank you
can get here to cash cheques in US $ is Citibank.
You will however be quite frustrated when you cash the cheques, as all
banks here will require rather high fees. (I´m frustrated every month
when I get paid in a US $ check and cash it.)
But there´s no bank here without fees for US $ checks.


Good Luck for your new business.

If anything should still be unclear please post a clarification
request before you rate or tipp my answer.

till-ga

Search strategy:

( ://www.google.de/search?sourceid=navclient&hl=de&ie=UTF-8&oe=UTF-8&q=gewerbeschein+ausl%C3%A4nder
)

---

Clarification of Answer by till-ga on 06 Apr 2004 13:07 PDT

Sorry for typos in my answer.

In the last paragraph (d) it should read
"so spend the money and find a "Steuerberater" in your town."

till-ga

thank you

If you want to avoid all the red-tape of operating your company within
the framework of the German finance and bureacratic system, you could
simply create an offshore company anywhere (in a low-tax jurisdiction
for instance), with a credit card merchant account.  If you Google for
this, you should find plenty of results.

This is entirely legitimate, however, how you pay your earnings to
yourself is the more complicated part.  If you decide you are paying
yourself a salary, then you are obligated to declare this to your
local tax authority (in your case Germany).  The Germans will then
make you prove that you are allowed to be self-employed, etc etc and
you will have a nasty headache.

If your company, however, gives you a credit card or some other way to
make payments directly, you won't have to worry about this.  Net
result of course is the same.

Note that if you don't pay tax in Germany (which has a double-taxation
agreement with Australia), you theoretically need to tell the
Australian tax office about your earnings and pay Australian tax on
it.  In the case of a small internet business, there is no way for
them to check, so make sure you follow the rules to avoid breaking
them.