“Freelancer Analyst” in the company: PwC's digital solution creates legal certainty
The ongoing shortage of skilled workers poses major challenges for companies. In order to meet their needs, even at short notice, HR departments are increasingly turning to self-employed workers, known as freelancers. However, the use of external specialists entails considerable risks. The distinction between self-employment and dependent employment is often unclear. On paper, the parties may have agreed on self-employment, but in actual practice, the work performed is comparable to that of an employee. Mistakes can lead to high back payments, especially of social security contributions, or even criminal prosecution. However, there are ways and means of achieving certainty in this area. A digital solution provides support here: the “Freelancer Analyst”.
Digital transparency instead of legal uncertainty
Many companies have no precise overview of how many freelancers are working for them or whether their legal status has been correctly classified. The “Freelancer Analyst” brings order to chaos. A central dashboard provides a 24/7 overview of all freelancers and indicates which of them work abroad or whether a status determination procedure for legal classification by social security is still pending.
With just a few clicks, HR departments can capture relevant data. The process is simple: after entering the freelancer's master data, the external specialist automatically receives a questionnaire that is adapted to their respective activity. Based on the answers, the system checks the risk of bogus self-employment and presents the results in a clear dashboard.
By Nikolaus Kastenbauer, Natalia Römer-Koshcheeva and Sena Bilgi
New Regulation in the Double Taxation Agreement Netherlands-Germany: Tax Relief for Cross-Border Home Office
On April 14, 2025, the Netherlands and Germany agreed on an important adjustment to their double taxation agreement. This agreement aims to significantly ease the conditions for cross-border home offices by reducing the tax and administrative burden for employers. However, it is important to emphasize that the changes will only take effect after ratification by both states. The newsletter provides an overview of the planned regulations, highlights the potential tax consequences, and offers practical recommendations for action.
Background and Regulation Content
The planned adjustment of the double taxation agreement between the Netherlands and Germany is a response by both countries to the growing importance of flexible working models. The changes are not yet in effect and must be officially confirmed, with the Dutch Council of State and Parliament, as well as the German Parliament, involved in the approval process.
After ratification, cross-border workers will be allowed to work up to 34 days a year from their state of residence without the taxation right shifting to the residence state. Under the previous regulation, tax liability was tied to the actual place of work, meaning even a single home office day led to proportional taxation in the residence state. The planned regulation defines a home office day as a day on which more than 30 minutes are worked from home, thus creating clear and easy-to-implement guidelines to avoid double taxation and increased administrative effort.
By Christina Neugirg and Lukas Hepp
Planned Wage Tax Initiatives from the Coalition Agreement between the CDU/CSU and SPD dated 9 April 2025
The coalition agreement provides tax changes that may also have an impact on the wage tax. In the following, we summarize the most important wage tax points, some of which still need to be specified in terms of exact implementation:
Reduction in wage and income tax for medium and small incomes
The coalition agreement provides a reduction of wage and income tax for small and medium-sized incomes. Although details and specific implementation provisions are still pending, the tax relief is not expected until the middle of the legislative period at the earliest, i.e. from 2027. This reduction could help to reduce the tax burden on your employees and increase their net remuneration.
The solidarity surcharge (Soli) is to remain unchanged. The existing regulations will not be changed: For example, the statutory annual exemption limit up to which no solidarity surcharge is payable is €19,950 for singles and €39,900 for couples in 2025 and €20,350 for singles and €40,700 for couples in 2026 of the payable income tax.
By Stefan Sperandio, Johanna Wolter and Gurkaran Singh
No Employer Status of a Permanent Establishment under Treaty Law - Judgment of the Federal Fiscal Court of 12 December 2024 (VI R 25/22)
The recent ruling by the Federal Fiscal Court (BFH) and the lower-instance ruling by the Lower Saxony Fiscal Court (FG Lower Saxony, ruling from 16 December 2021 - 11 K 14197/20) have important consequences for international companies in terms of wage tax. It was disputed whether the plaintiff had as a domestic employer to deduct wage tax from the wages of the employees of its foreign branches on domestic business trips in accordance with Section 38 para. 1 sentence 1 no. 1 German Income Tax Act (EStG).
Facts of the case
The plaintiff, a public limited company, with its head office and several branches in Germany, also has numerous branches in other European and non-European countries. Various of the employees in a civil law employment relationship with it worked at the head office and the branches in Germany and the other employees worked at its various foreign branches. The employees working at these foreign branches were resident and domiciled in the respective country of employment.
The aforementioned employees based abroad came to Germany at irregular intervals for short-term business trips (for training courses, seminars, workshops, project work, management forums, etc.), in particular to the head office. The employees undertook these domestic business trips in the interests of the respective foreign branch office, which also bore the respective travel expenses in addition to their full remuneration. The entire costs associated with the activities of these employees were recorded by the respective foreign branch in its accounts and the German parent company did not reimburse these costs in full or in part.
By Stefan Sperandio, Johanna Wolter and Gurkaran Singh
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