Working in the construction industry in Germany

The demand for new-build homes in Germany is growing. And with qualified workers being in short supply, there are many opportunities to be had for Dutch businesses. To work in Germany, you need to be familiar with local rules and regulations, known as the Bauordnungen (in German). In this article, you will find out how to meet the requirements set by the German government and avoid fines, delays, and liability. German customs regularly check whether Dutch companies are following the rules. 

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. Start on time and ask organisations how long it will take before you receive a permit or declaration. 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.

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 

Craftsmen working as independent contractors in Germany 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 your business starts work that requires a permit in Germany , register your company in the Handwerksrolle of the regional German Handwerkskammer (HWK, in German). The first place in which you perform work in Germany determines which HWK you should register with. Non-construction-related craftspeople such as hairdressers and bakers also need a permit. After registering, you will receive a one-year permit for each activity, which can be extended free of charge. 

If you carry out an unlicensed craft profession, you must report this to the local HWK. You do not need to register in the Handwerksrolle. 

Meisterpflicht 

Professions in the Handwerksrolle are subject to a so-called Meisterzwang. This means you are only allowed to practice the profession independently if you pass your Meisterprüfung, or master’s exam. 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). 

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. 

EU declaration 

Dutch professionals carrying out construction work in Germany may be exempted from the Meisterprüfung. They will have to apply for an EU declaration (in Dutch) at KVK. This must be submitted as proof of their professional competence when they register themselves in the Handwerksrolle. They also need to submit a KVK Business Register extract. 

If you meet the requirements, KVK will issue an EU declaration. It helps if you have ample experience in the Netherlands as a self-employed contractor or manager. Professional qualifications are also helpful. As proof of registration in the Handwerksrolle, you will receive a Handwerkskarte. You or your employee must always carry this with you when performing work. 

If you have to meet qualification requirements to work abroad and have questions, please contact the KVK Advice Team.

German construction law 

German construction contract law is part of the German civil code (BGB, in German). Before you get started, seek advice from a legal adviser. Check whether your methods are fully compliant with German rules and regulations. 

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 Mindestlohnkommission is responsible for proposing the rates. Every 2 years, this committee reviews whether the minimum wage should be adjusted. The legal minimum wage in Germany is currently €12,41 gross per hour. From 1 January 2025, this will be €12.82 gross per hour.

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 

If you are only planning to work in Germany temporarily, you can hold on to your social security coverage in the Netherlands. An 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). With this certificate, you will not have to pay social security contributions in Germany. For questions about social security in Germany, contact SVB’s Bureau of German Affairs (BDZ). 

VAT rules 

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. 

For Dutch entrepreneurs, all VAT registration matters are handled by the Finanzamt Kleve (in Dutch). Check whether you are required to register for VAT before you start working in Germany. 

Exemption statement 

In Germany, the principal of a construction contract usually withholds Bauabzugsteuer (in German). This tax amounts to 15% of the invoice amount that the principal has to pay to German tax authorities. Dutch construction companies that meet certain conditions can reclaim this amount from the German tax authorities later. 

You can also obtain an exemption statement, the so-called Freistellungsbescheinigung (in German), from the Finanzamt Kleve before you invoice your client. If you pass on this statement to the principal, they will not have to withhold Bauabzugsteuer. 

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.