I work in a company that employs people all around the world (remotely). Since it does not have bases in particular countries, their employees are essentially contractors that renegotiate the contracts when needed. They call us employees, despite the fact that our situation is a bit different. The renegotiation is therefore not really meant to be renegotiation, but just automatic extension, because we are supposedly employed there full time.

For my contract I planned to renegotiate yearly (due to local laws on contractors). However, at the beginning I signed a 6 month contract and then planned to extend. When the time of extension came, I contacted the leadership and they said that they are busy, but will extend. It turned out that they did not want to extend and I got this as a result after a few months without a contract.

The leadership does not know what is your next project, so they are not sure if they should extend the contract. Also, he said I might get an offer in another company that is connected to this one. Also, they seem to be fine with me working without a contract (despite the fact that I am dealing with some of their essential IP).

It seems there is a major disorganization at the top positions at this company. I wonder what are the right things to do from my side. Can I get in trouble for not having a contract with in when it comes to my taxation? I fit in German taxation law. Given that the company is small, if that is the case, should I contact HR? The HR also knows my situation is not standard, but I am not sure if it is able to do anything about it. Some law help would be useful here. Also, I wonder how to communicate this with the bosses.

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    Do you want a contract? Please don't be shy about telling us what you really want. You can say the company is disorganized, but from my point of view, they're getting exactly what they want. If you don't tell us what you want, this question will probably get closed because it's asking about taxes and laws, so people will just tell you to consult with a tax professional in your jurisdiction, and that will be the end of it. Commented Apr 9, 2022 at 21:13
  • But on the other hand, if you do want a contract, or a raise, or better terms, or an actual longer term commitment from the company (instead of just vague promises), you do need to tell us, but also, this goal might be better suited for the freelancing.stackexchange.com stackexchange. Commented Apr 9, 2022 at 21:21
  • You are right! They are getting what they want and I do not! I want a long term contract as it was promised to me or short term contract, so I can be safe regarding the tax situation. Are the invoices enough for taxation purposes? As for another issue you brought up - how to talk to a client - yes I would love to know the answer to this as well in order to get my tax situation sorted. Commented Apr 10, 2022 at 12:04
  • So, I guess I have two questions here. First is how big of an issue this is and what would be a way to solve it tax-wise? Talk to HR and include everyone in it? Just quit since there is no contract anyway? And the other one is how to communicate with the company to get the better terms. Should I split it to two questions? Commented Apr 10, 2022 at 12:12
  • As a general rule of thumb, run away as fast and as far as you can from anyone who tries to make you work without any kind of contract.
    – mrodo
    Commented Apr 12, 2022 at 11:52

2 Answers 2


I'm making a few assumptions here: you are working a normal day job. You get a normal sized salary, not 450€ or less, but you aren't super rich or own a mega corp or two. You are a normal person with a normal job for normal money.

There are three options:

  • You can be employed by a German company or German branch of an international company.
  • You can be self-employed, work for multiple clients (around the world) and invoice them.
  • You can have your own company. That company can do as it pleases inside the law. It might sell services world wide, invoice those that use them, employ you as CEO and pay you a salary for example.

You may notice that "I get money from somewhere regularly and I claim I work for someone" is not one of the three. Why? International money laundering laws. You cannot just have money appear in your account with no paper trail.

Since they won't give you a direct employment contract (never met a company who would directly employ people in a foreign country, it's a mess), you need to be either self-employed or form a company to be able to invoice them for the money they owe you for the services you provide. When you do this, you are on your own. Social security, health insurance, all this is mandatory, but while it is made very easy as an employee (basically, the employer does the paperwork, you never see the money as it goes directly to those institutions), if you are self-employed or you are your own company, you have to do this manually. And since you are employer and employee in one person, for example for health insurance you now pay double the rate, since the employer normally pays half of it.

So... what you need is a lawyer or tax accountant who can guide you through this. You cannot just work and get money for it. There are rules. For example, if you are self-employed, you cannot have a single client. That would be illegal. You are supposed to have multiple clients (like for example a tailor or painter), not work for a single corporation exclusively. Because that would undermine all labor laws. They protect employees, not contractors, so being a contractor to a single company is... seen as dodging labor laws. If you are making good money it seems weird, but as soon as you see that every guy who delivers mail to you has suddenly become their own contractor, you know why it makes sense. Self-employment was never meant to avoid things like minimum wage. And being a contractor with a single client is exactly that.

Summary: You need guidance, more than just an internet post. Hire a consultant to guide you through this and set it up according to German laws and regulations. I guarantee you that if you don't, you won't even know if the money you get is worth it or if a regular job would pay better in the end, because of the money that reaches your account you are supposed to pay various fees and taxes. Not doing so will only mean that you will get a huge bill from the Finanzamt at some point.

  • AFAIK being self-employed with a single client isn't illegal for the employee, it's illegal for the company hiring them. It makes the company liable for social security avoidance and it makes it possible for the employee to retroactively sue for the benefits they missed out on. But all of this of course gets messy when it happens across borders. Labor laws haven't yet caught on to the 21st century where everyone can work for anyone from anywhere in the world.
    – Philipp
    Commented Apr 11, 2022 at 12:20
  • Summary: employing a random person in Germany legally is complicated for an international firm and requires someone familiar with German labor and tax law to do properly. It's meant to protect employees but even if the employee doesn't know about it or doesn't want it, the company can be in trouble if they don't do it properly.
    – quarague
    Commented Apr 11, 2022 at 17:43

It depends how you're getting paid (If you're being paid into a paypal account or something similar then it's under the radar anyway.) and if you want a contract.

Check if this work could fall under the rules governing informal work. I'm unsure about Germany but in countries I am familiar with there is a threshold under which you are not required to declare the work or pay tax on it.

  • I do have to declare work and there is a chance that the government would audit me. Are invoices enough in such a case? Commented Apr 10, 2022 at 12:05
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    @user645643523 The tax people just want their cut. IMHO If you can show invoices that match the income that appeared in your (bank) accounts, and that matched what you declared on your taxes, then generally they are happy. But those are questions for your accountant.
    – Peter M
    Commented Apr 10, 2022 at 14:13
  • @user645643523 - Are the invoices enough to calculate your tax liability?
    – Donald
    Commented Apr 10, 2022 at 16:36
  • Yes, all the payments that I got were recorded on invoices. There is no problem about that. But I am more than likely to get audited and I want to have my books completely clean. I am not sure how that goes with not having a contract - I heard for some others that they had to show contracts, though their work might be different than mine. Also, I am working for foreign companies. Commented Apr 10, 2022 at 16:58

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