Comment by randomNumber7
1 year ago
This is absolute nonsense. Using buzzwords can not replace reasoning. There are structural problems why germany failed to build a digital economy.
1 year ago
This is absolute nonsense. Using buzzwords can not replace reasoning. There are structural problems why germany failed to build a digital economy.
I realized a few weeks ago how broken IT in Germany is when I talked to a guy who turned out the CIO of a known German retail company. We did not talk about technology, exciting projects, ideas or similar, but about the complexity of the privacy act and "Scheinselbständigkeit" (false self-employment, which is a huge issue for start-ups and self-employed people in Germany). Out brains are so busy thinking about stuff that should just not have that much brains share, that we have not enough time to think about innovation and technology. I really wish they would drastically cut bureaucracy, but I just don't see it.
I think you got this wrong. Laws against Scheinselbständigkeit are protecting individuals from being exploited, and it's one of the things that characterizes the EU.
Don't forget that outside of Europe, most big economies were built on the ongoing exploitation of the working class. I am not saying this didn't happen in Europe, but at least there are efforts to curb this.
So a CIO complaining that he can't exploit people for cheap labour is not an argument for broken IT laws. It's an argument for seeing that it works as intended.
Nobody is being exploited, most people _want_ to self-employ to not get chewed by income tax.
Most states in Europe treat you like you're mister money bags for anything above 50k a year.
You can choose:
- Cost of living (read Housing)
- Taxation
- Income
Government's need to curb one of the first two or boost the third, otherwise people will always be looking for the exit door.
Thank you for giving an insight into the typical German way of thinking by immediately suggesting that the CIO was complaing about not being able to exploit his employees. He was not. I told him that I am running a tiny company and he warned by about the pitfalls of Scheinselbständigkeit.
The best argument against the EU is a 5 minute conversation with anyone who supports it.
>Scheinselbständigkeit" (false self-employment, which is a huge issue for start-ups and self-employed people in Germany)
Can you provide more details about this? How is this a problem and why does it affect startups?
Germany has really, really strong employee protection. Hard to fire, mandatory vacation, mandatory pensions, mandatory maternity and paternity leave, ect.
If you run a society like that, you immediately face a problem: people try to get around the employee protection measures by relying on the gig economy, by hiring freelancers or by starting small companies.
So, the German tax agency has the additional authority to crack down on that. If you work freelance or run your own company, you need to always have several customers. If your only customer is a single company, the tax agency argues that you aren't actually a freelancer/small company, you are a de-facto employee of that company, and the two of you are violating several laws and owe back-payment on several employee benefit systems. Also, that's fraud BTW, here's your case number.
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Well, if you employ self-employed people in your company and after a while you or they get audited and it turns out that you are their only customer, the will be classified as employees of your company. As a result you may have to pay social insurance, pension fees, etc. for the all time they have been working for you, which can be a hefty sum and may break your neck as a small company. Oh another problem that I had not mentioned is that it's extremely difficult to fire people once you have reached a certain size (I think 10 employees or something).
One of the most important rules in Germany for startups: Employ as few people as possible. And I am not joking.
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No the OP, but Scheinselbstständigkeit is one of the scarecrows of freelancers and their clients in Germany. It is actually not very difficult, but in certain cases it is very limiting. If you can read German, here is a handy reference sheet, which is distributed by virtually all tax advisors [1].
[1] https://www.sup-kanzlei.de/fileadmin/user_upload/Scheinselbs...
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If you are self employed and work a prolonged time for an single customer the german irs can rule that you are effectivly an employed person under the guise of self-employment. The company and the person have to pay then a sum of money for different social security insurances.
https://redtapetranslation.com/do-i-need-to-be-worried-about...
https://allaboutberlin.com/glossary/Scheinselbstst%C3%A4ndig...
Try opening a business in Germany to find out why.
I did, it was super easy.
How long did it take you from start to finish?
In Australia, Canada and the US I can open a company in about 30 minutes from picking the name to opening a bank account I can get money into.
In Germany the last time I tried it was about 7 weeks.
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It most certainly is not easy, especially compared to other countries.
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It takes months and you’re required to go to a notary at least twice and you have to put down 12500/25000EUR.
This is absolute nonsense. In the UK you can open a limited company with 12GBP in a matter of days. Oh and it’s completely online, something which Germany will never have in the foreseeable future.
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