Who is considered an employee? Differences in tax, social security and labor law

While in the cases mentioned there is at least an oral or written contract between the parties involved, tax law, in order to secure fiscal claims, also extends the employer's obligations to the recipients of benefits who have no contractual relationship with the employee, but do have with their employer.

After that, the person who “economically bears the wages for the work performed” is also declared to be an employer in cases where a foreign employer sends employees to a domestic company. The prerequisite for this is not that the company pays the employee's wages in its own name and for its own account. It is sufficient if the wages from abroad are passed on to the domestic company via internal billing.

Wages paid by a third party as part of the employment relationship are also subject to wage tax if the employer knows or can recognize that such remuneration is being provided; This is to be assumed in particular if employers and third parties are affiliated companies within the meaning of § 15 of the AktG.

The fact that in these cases, in addition to the issue of payroll tax, an unrecognized payroll tax permanent establishment and, depending on the situation, also an income tax permanent establishment of the foreign company arise, makes the matter even more exciting.