Sham Self-Employment and Entrepreneur Status: VAT Implications

• The text discusses “false self-employment” versus entrepreneur status in VAT law, using a music teacher (A) at a music school (B) as an example.
• Although B treated A as an independent contractor, the German Pension Insurance classifies A as an employee due to dependent employment.
• The main question is whether this employment classification affects A’s status as an entrepreneur under VAT law (§ 2 UStG).
• A second issue is how to handle the case if a payroll tax audit also classified A as an employee under income tax/labor tax rules.
• The article frames these as practical VAT questions with broader relevance beyond the individual case.

Source: datenbank.nwb.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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