Is it allowed to position privacy screens arbitrarily on your own property?

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The disadvantage would be that the seat is so close to the neighboring property. And we would have to walk further from the kitchen to the terrace.
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It’s not a permanent seating area anyway, just an option to vary things once in a while if the mood strikes, and the corrugated iron hut might then still serve a purpose not only for the neighbors but also as a privacy screen towards you.

There can be more than one place to sit. Maybe a small fire basket for wine evenings.
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That’s how it is :)

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... but the nice second seating area.

That’s what is meant. I would still plant greenery on the corrugated iron wall, more precisely: the privacy screen. Hops are supposed to be suitable for that. A roof would also make sense. Of course, nothing too flashy :)
We still have something like that planned with us. At the moment, we have a huge hedge with conifers. They will have to go soon because they stand too close to the neighboring property.

There can be more than one place to sit. Maybe a small fire basket for wine evenings.

Otherwise, as long as the shed doesn't basically bother you, you can build a privacy screen there and let it be covered with climbing plants. At least at the usual height.

Yes, that was the idea. It doesn't bother me that they have a shed, I just don't like looking at it. ;) But the problem can be solved on my property. Whether we’ll build a seating area there is still to be seen; for now, I would first plant some shrubs in that corner as a noise barrier wall. Something that fits the adjectives "green, pretty, cheap". ;)

There can also be more than one place to sit. Maybe a small fire basket for wine evenings.

Otherwise, as long as the shed doesn't bother you in principle, you can build a privacy screen there and let it be covered with plants. At least at the usual height.

Fire basket is great, the sparks will elegantly solve the hut problem :D

I believe corrugated iron is relatively insensitive to sparks. In addition, "Feuerkorb" is not necessarily the same as "Feuerkorb". I could also imagine a covered barbecue area there.

Fire basket is great, the sparks will elegantly solve the hut problem :D

Just yesterday I read the short story "Ash Monday" by T.C. Boyle. That seems to fit very well here.

I think corrugated iron is relatively insensitive to sparks.

Imagine the neighbors illegally build a wooden hut in a peripheral development, you create a fire pit that meets all legal requirements, and their hut burns down due to sparks. I believe any insurance can disclaim liability in such a case. This is not meant to be a topic change, it's also about corrugated iron... but it's quite something. The correct approach would have been if the neighbors had made a green enclosure and then placed the hut with their 3-meter distance. Then the problem wouldn't exist.