As a subcontractor, you are commissioned by a general contractor. Your task is to provide services within the agreed scope of the order. You have an independent contract with the general contractor. For you as a subcontractor, this means, for example, that the general contractor assumes liability in the event of problems, which he can assert in a recourse claim against you.
It is important that a subcontractor agreement is concluded that clearly states who is responsible and liable for what. These contracts can be Contract for work be concluded in accordance with the BGB or as a VOB contract. The VOB contract applies specifically to the construction sector.
What documents do you need as a subcontractor?
First of all, you need proof that you are actually self-employed. This means that you first need a trade licence. As you are working as a subcontractor for a general contractor, you also need a membership certificate from the Chamber of Industry and Commerce or Chamber of Crafts. You will also need business liability insurance in the event that the general contractor makes recourse claims against you.
The proofs are rounded off by clearance certificates. You will need these from the relevant social security fund and also for the tax office. Income tax, corporation tax and VAT are important for the tax office. You also need a certificate of exemption.
If you are travelling as a subcontractor in the EU, you will need a business registration from your home country. You must also register with the German tax office. You should also not forget to register with German customs. If you practise a craft requiring a master craftsman's certificate, you will also need the German Chamber of Crafts service notification. And finally, the passports or identity cards of the staff you will be employing.
The minimum wage certificate
If you are working as a subcontractor in the EU, you must have a current Proof of the minimum wage certificate. A nationwide regulation has been in force in Germany since 1 January 2021.
The minimum wage for labourers is therefore 12.85 euros per hour. The minimum wage for skilled craftsmen is 15.70 euros per hour.
Important: As a general contractor, you are liable as a guarantor under Section 13 MiLoG for ensuring that your subcontractors comply with the statutory minimum wage - even if they come from abroad. Find out more: General contractors and subcontractors - liability and obligations.
The A1 certificate
In addition to the minimum wage certificate, the A1 certificate one of the most important documents for EU subcontractors operating across borders. It proves in which country the employee is subject to social security contributions and must be able to be presented at any time during inspections.
The A1 certificate must be applied for before the start of the assignment. If it is missing during an inspection, there is a risk of severe fines - for both the employee and the client. Everything you need to know: A1 certificate - mandatory for postings abroad.
What does the subcontractor agreement contain?
The main client is your business partner. It is advisable to conclude a contract so that there are no problems later on. The following things should be regulated here:
- Subject matter of the contract - clearly defined services and obligations
- Execution deadlines and acceptance
- Provision of work equipment
- Agreement on the use of materials
- Remuneration, invoicing and payment
- Liability, claims for defects and insurance
- Non-compete clauses and confidentiality and customer protection clauses
You can read more about the individual contract components in our article: Essential components of subcontractor contracts in the construction industry.
Avoid bogus self-employment
A key risk in the use of EU subcontractors is the Bogus self-employment. If a subcontractor is de facto deployed as an employee - with fixed working hours, bound by instructions and working exclusively for one client - the German pension insurance or the tax office can initiate a status assessment. The consequences are back payments of social security contributions and income tax. Find out more: Avoid bogus self-employment.
Frequently asked questions for EU subcontractors in Germany
As a minimum, you will need: a trade licence from your home country, a certificate of membership from the Chamber of Industry and Commerce or Chamber of Crafts, public liability insurance, clearance certificates from the social security and tax authorities, exemption certificates, A1 certificates for all employees deployed and identification documents for staff.
The minimum wage certificate proves that the statutory minimum wage is paid. It is mandatory for all subcontractors working in Germany - regardless of whether they come from Germany or another EU country. The current minimum wage is 12.85 euros (labourers) or 15.70 euros (skilled workers) per hour.
Yes, foreign subcontractors working in Germany must register with the German tax office and fulfil their tax obligations (VAT, corporation or income tax if applicable). It may also be necessary to register with German customs.
If the A1 certificate is missing during an inspection, fines of up to 30,000 euros per person can be imposed - on both the employee and the employer. In some EU countries, work can be stopped immediately. The certificate must therefore be applied for and carried before starting work.
Global Business Recruiting has a network of more than 100,000 specialists from various sectors in Poland, Slovakia, the Czech Republic and other EU countries. We take care of the entire process - from drafting the contract and obtaining evidence to the secondment - in a legally compliant and uncomplicated manner.
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