The new financial year is here, bringing new and significant changes to New Zealand’s taxation & payroll. As a business, it is essential to remain up to date on new emerging payroll trends. 2021 comes with a new suite of major changes in employment legislation, and we are here to uncover all the latest… Read more »
Networking is an essential part of professional life. While it might not be crucial in every field, the importance of networking should never be underestimated. So what is networking? Essentially, networking is the act of creating connections with colleagues, clients and experts in your field. There is a perception that networking is a shallow… Read more »
With the world becoming a global village of sorts, more and more businesses are looking to scale-up and dip their toes in international waters. But when looking to expand, the question beckons, “how can one focus on growing a business, as well as make sure it remains compliant at the same time?” The answer… Read more »
There are many advantages to outsourcing your human resources function, especially when you’re a foreign company looking to explore a new market or expand to a new country. While it might initially seem counterintuitive to let a third-party vendor handle a business area as interpersonal as HR, outsourcing it doesn’t actually take away from… Read more »
Now that you’ve found your dream job in France, how do you get shortlisted with that perfect CV? It’s important to remember that every country has its own CV standards to abide to. This may impact the structure, length, and general format among other things. Depending on the industry type, even the tone that… Read more »
Friday, 12 February 2021 marks the beginning of the new lunar year. This year will be the Year of the Ox. The second of all zodiac animals. Also known as Chinese New Year, Spring Festival, or Chunjie (China); Tet (Vietnam); Seollal (Korea); or Losar (Tibet), Lunar New Year is celebrated by about 1.5 billion people around the… Read more »
Do you feel a sense of stigma when negotiating your salary? Feel uncomfortable when placing emphasis on your salary package? This feeling can be magnified in times like COVID-19, when the job market is oversaturated and the future seems uncertain. Whilst this is true, negotiating a fair salary is not only valid and reasonable,… Read more »
We’re thrilled to share that Polyglot Group is now certified for Business France’s Cheque Relance Export! But wait a second… What is it and why does it matter? What is the Cheque Relance Export? For those of you who don’t speak or understand French, “Relance Export” translates to “Reboot Trade”. Unsurprisingly, since COVID-19, businesses… Read more »
Company culture is the heart of a business, a set of shared beliefs adopted by all the people in the organisation and supporting its strategy and structure. According to Deloitte’s research, 94% of executives and 88% of employees believe strong company culture is essential for a thriving business. In today’s day and age, employees… Read more »
On the 30th of January 2020, the World Health Organisation’s Director – General declared a Public Health Emergency of international concern due to the COVID-19 pandemic. This marked the beginning of a domino effect that would shape our current job market. Indeed, the dynamics that once drove the recruitment industry changed dramatically as governments… Read more »
Located in the northern part of central Europe, Germany is officially known as the Federal Republic of Germany, Deutschland or Bundesrepublik Deutschland. It is one of Europe’s largest countries. It covers the area between the Netherlands, Belgium, Luxemburg, France, Switzerland, Austria, Czech Republic, Poland, Denmark, the Baltic Sea and the North Sea.
There are 16 German states, each with their own head of government, legislature and government party coalitions.
The German population is roughly 83.6 million people. With a life expectancy of almost 82 years and a steady decline in the birth rate to 1.5 births per woman, the country is now spending close to $265 million every year in an attempt to reverse the declining population. The population growth rate is currently around the 0.2 per cent mark but is expected to dip into the negatives by 2025.
Germany is the largest economy in Europe and the 4th largest in the world with a GDP of approximately 4.117 trillion USD. Economic growth remains steady around 2% annually. Inflation has been slowly increasing to 2.0% from 0.4% in 2016.
Germany continues to experience large fiscal surpluses, which in turn has led to the steady decline of the public debt ratio.
With a strong financial system, low unemployment, low public debt and a highly-skilled workforce, the driving force of the German economy has shifted from exports to consumption and investment. Germany is the largest consumer market in Europe and much of its trade is focused on some of the world’s largest trade events, including MEDICA, the Hannover Fair, Automechanika and the ITB Tourism Show. For these reasons, many companies seek to base their European / international expansion in Germany.
With strong trade ties primarily with Europe, but also with Asia and the US. The export value in 2017 was $1.33 trillion, while imports came in at $1.08 trillion.
The country is primarily focused on exporting manufactured goods, with a focus on transportation for products such as cars, vehicle parts and planes, helicopters and/or spacecraft. Machinery and medical products also make up a large portion of German exports.
Germany’s largest trade partner, in terms of exporting its goods, is the United States, followed by France, China and the rest of the European Union. In terms of imports, China accounts for 10%, followed by much of the European Union and the United States.
Top imports into Germany include many of the same goods exported from the country, including machinery, transportation and chemical products.
As part of the European Union, Germany enjoys free trade with the rest of the European countries and is able to negotiate trade agreements with the backing of the EU. There are agreements with Vietnam, New Zealand, Australia, Singapore, Mexico, Japan, Canada and the Mercosur group in focus, but also many more currently in play.
Expanding to Germany? Here is a breakdown of the key things to keep in mind.
There are many ways that a business can be set up in Germany. International companies might choose to register a branch office, open a subsidiary, or form a general / limited partnership.
Most of the population, over 60% of the German workforce, is employed by SMEs. The unemployment rate is currently around 5.3%, which has fallen by 1% over the last 3 years.
German employment laws tend to be more favourable towards the employee in terms of termination protection, applicable collective bargaining agreements, and holidays.
Grants are available to businesses looking to recruit and employ people unable to work due to personal circumstances, such as disability or long-term unemployment.
From Germany, companies have access to the European talent pool. All EU citizens are able to work in Germany without a visa. Those recruited from outside of the EU are required to apply for and obtain a residence permit in order to work and live within Germany for more than 3 months. The visa is obtained from the German embassy consulate in the applicant’s country of permanent residence.
Payroll in Germany requires companies to obtain an employer number and registrations from the country’s tax and social security authorities. Employment law encompasses the employees right to join a union, a minimum wage and legal entitlement to time off.
In terms of tax collection, it is the employer’s responsibility to calculate the amount of income tax for each employee. This amount should be withheld from gross payments each month and submitted to the appropriate tax office by the 10th of the following month.
Employers and employees must both contribute to social insurance, including health, pension, unemployment and nursing care.
In Germany, the financial year follows a standard calendar year, ending on 31 December. Corporation tax is 15% on company profits. Business can deduct expenses from computations of taxable income. The tax return must be filed electronically by 31 July of the following year. If working with a tax advisor, filing can be extended to the last day of February of the second year following the tax year.
VAT is applied on the sale of all goods and the provision of services at a rate of 19%, potentially reduced to 7% on certain transactions. A refund will be paid if the input tax exceeds the VAT.