Working in the construction industry in Germany

Netherlands Enterprise Agency RVO conducted research into opportunities in the sustainable construction sector in Germany. This report outlines the opportunities available to Dutch entrepreneurs. Do you want to successfully carry out a job in Germany? Then you need to be familiar with German laws and regulations. These are set out in the Bauordnungen. This article provides more information about German requirements for construction work and what you need to arrange in advance to comply with the laws and regulations.

Prepare

Before you start your job in Germany, there is a lot to arrange. Requesting and filling in all documents takes a lot of time. You also need to understand the German language. Is this difficult for you? Then hire a specialist who can help you with this.

For your activities in Germany, you set up a completely new administration. Which you then have to keep. Make sure you have everything arranged before you start working. This way, you avoid fines, delays, and liability. The German Customs Administration regularly checks whether Dutch businesses are following the rules. Start preparing on time and ask organisations how long it will take before you receive a permit or declaration.

Do you only have one job in Germany? Then ask yourself whether it is worth setting up this administration. At the end of the job, you do want to be left with money.

Advance notice 

If you want to carry out craft work in germany, you must register in the so-called Handwerksrolle according to the Handwerksrecht. The Handwerksrolle is the German craft register and part of the Handwerksordnung. This states when you do need a permit (in German) to perform certain work and when you do not (in German). 

Before you start carrying out work that requires a licence, you must register your business. You do this with the Handwerksrolle of the regional German Handwerkskammer (HWK). You register with the HWK in the town where you carry out your first job. After registering, you will be issued with a licence for each activity, valid for one year. After that year, any renewal of your licence is free of charge.

Do you practise a trade that does not require a licence? If so, you must notify the local HWK. You do not need registration in the Handwerksrolle for this.

Meisterpflicht 

The Meisterpflicht applies to Dutch entrepreneurs who require a permit and: 

• Are based in the Netherlands and are working in Germany as an independent contractor. 

• Establish a company in Germany and work in Germany. 

• Are based in the Netherlands and Germany, and work as an independent subcontractor in Germany. 

Practising a trade listed in the German Register of Crafts is subject to the Meisterzwang. This means that you may only practise this trade independently once you have passed your Meisterprüfung. This is a master’s examination for your trade.

After passing the exam, you will receive a Meisterbrief, a certificate demonstrating your professional competence. This qualification requirement serves to protect certain professions and guarantees a certain level of quality. This qualification requirement is also known as the Meisterpflicht and applies to all legal forms (source: Strick, Rechtsanwälte & Steuerberater). 

EU declaration 

An EU certificate demonstrates that you are professionally qualified. You will then not need to take the Meisterprüfung. You will be issued with an EU certificate if you meet the requirements. Your experience in the Netherlands and your trade qualification will be taken into account.

Are you a Dutch tradesperson carrying out work in Germany? If so, apply for an EU declaration from KVK. You must submit this certificate when performing the registration with the Handwerksrolle. You must also provide an extract from the KVK Business Register for your business.

Once you have completed your registration, you will receive a Handwerkskarte. This serves as proof of your registration in the Handwerksrolle. You must always carry this card with you to the place where you are carrying out your work.

Do you have any questions about qualification requirements for your profession abroad? If so,please contact the KVK Advice Team.

German construction law 

If you want to work in the construction sector in Germany, you must comply with German construction law. This is part of the German Civil Code (BGB). Check that your way of working complies with German rules before you start. Do you have doubts? Then seek advice from a legal adviser.

Registering your employees 

If you have employees working in Germany, you must register them digitally with the Finanzkontrolle Schwarzarbeit of German customs before they start their work. By registering your employees, you comply with the minimum employment conditions set out in the Arbeitnehmer-Entsendegezetz (in German), Germany’s basic secondment guidelines. Even if your employees are only performing menial tasks such as repairs or maintenance, you are required to register them. For more information about collective labour agreements and other guidelines, visit the website of German customs. 

Rules for employers 

The minimum wage in Germany is governed by the Mindestlohngezetz. The legal minimum wage in Germany is currently €12.82 gross per hour.

The Mindestlohnkommission is responsible for proposing the rates. Every 2 years, this committee reviews whether the minimum wage should be adjusted.

Certain industries in Germany have a collective labour agreement with a higher minimum wage. This Tarifvertrag (in German) applies to construction workers, electricians, roofers, painters, varnishers and the like. 

Employers are required to keep time sheets for each employee and construction site. All required documents must be present at the construction site. For example, employment contracts translated into German, proof that workers are paid at least the German minimum wage, recent pay stubs, A1 certificates, and verifiable health and pension insurance. 

Also make sure that the translated employment contract complies with German law. Consider whether you want to draw up a special employment contract with your employee(s). For example, for the period that your employee will be working in Germany. For this period, you then agree on employment conditions that meet the requirements in Germany. Think about minimum wage, collective labour agreement (CAO) wages and number of holidays.

The Cross-border Labour and Business team (in Dutch) of the Netherlands Tax Administration can answer all your questions about payroll taxes in Germany. 

Digital registration requirement 

Employers sending employees to Germany have to digitally register their employees with German Customs. This also applies to employers who employ workers through a temporary employment agency with a registered office abroad. Workers and employees have to be registered for Mindestlohn, Arbeitnehmer-Entsendegesetz and Arbeitnehmer-Überlassungsgesetz. German customs use the electronic Meldeportal Mindestlohn. 

A1 certificate 

With an A1 certificate, you do not pay social security contributions in Germany. If you are only planning to work in Germany temporarily, you can hold on to your social security coverage in the Netherlands. A free A1 certificate of coverage is proof that you have social insurance coverage in the Netherlands. You can request this certificate from the Social Insurance Bank (SVB). For questions about social security in Germany, contact SVB’s Bureau of German Affairs (BDZ). 

VAT rules 

Check in advance whether your business needs to register for VAT. The Kleve Tax Office handles VAT registration for Dutch entrepreneurs.

If you provide services to German consumers, you may have to pay VAT in Germany. For business customers, you may be allowed to reverse charge the VAT. Read how VAT works when providing international services. 

Exemption statement 

In Germany, an exemption certificate is known as a Freistellungsbescheinigung. With this certificate, your client pays the full invoice amount. You can apply for an exemption certificate from the Finanzamt Kleve. You can only do this if, as a company from the Netherlands, you meet the conditions.

In Germany, the client commissioning a construction project usually withholds Bauabzugsteuer. If you do not have an exemption certificate, your client will pay 15 per cent of the invoice amount to the Netherlands Tax Administration. You can then claim this money back from the Netherlands Tax Administration afterwards.

Leave regulations 

If your employees work in the construction industry, you, as their employer, may be subject to the contribution obligation of the Urlaubs- und Lohnausgleichskasse (ULAK) of the SOKA-Bau (in German). This Sozialkasse der Bauwirtschaft is the German leave fund for builders.