[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.0.6″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”20px||20px||true|false”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2018\/04\/English-jobs2-min.jpg” _builder_version=”4.0.6″ width=”60%” width_tablet=”85%” width_phone=”95%” width_last_edited=”on|phone” module_alignment=”center” border_radii=”on|10px|10px|10px|10px” box_shadow_style=”preset2″ box_shadow_horizontal=”10px” box_shadow_vertical=”10px” box_shadow_blur=”12px” box_shadow_spread=”1px” box_shadow_color=”rgba(0,0,0,0.5)”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Freelancing vs. self employment” _builder_version=”4.0.6″ text_orientation=”justified” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n
Self-employment vs. working freelance in Germany: what’s the difference?<\/strong><\/h2>\n <\/p>\n
The status of “freelancer” in Germany has a subtle and very important different definition to the way we understand the term in English. This is driven by German tax law.<\/strong><\/p>\nThere are a certain set of professions known as the Freie Berufe<\/i><\/strong>, roughly translated as the freelance professions<\/strong><\/em>, which is what we’ll call them from hereon in.<\/p>\nThese professions are not subjected to certain rules and regulations of German tax law that other trades (which we’ll refer to as self-employment or sole trader businesses) must comply with.<\/p>\n
This can have a whole range of consequences, ranging from:<\/p>\n
\n- the registration process of your business;<\/li>\n
- the amount of tax you pay;<\/li>\n
- whether you must join your local Chamber of Industry and Commerce;<\/li>\n
- the documentation you have to submit with your tax return;<\/li>\n
- and finally, but extremely important for those who are not EU\/EEA citizens: This can also impact the amount of time taken to grant your residence permit, as well as \u00a0and the type of permit you will be granted.<\/strong><\/li>\n<\/ul>\n
We do not cover the freelance \/ self-employment visa application process in this article. There is a lot of inaccurate information out there on the interwebs too, so beware…<\/p>\n
Some particular gems I found were:<\/p>\n
\n- The freelancer visa is only available in Berlin (absolute rubbish)<\/em><\/li>\n
- German income tax for the self-employed is 19% (completely untrue, that’s the VAT rate)<\/em><\/li>\n<\/ul>\n
If you’re serious about applying for this visa and want to save yourself the cost of hiring a consultant, as well as the worry of dependency on blogs and YouTube, I strongly recommend our online course<\/a><\/strong> all about how to get the German Freelance Visa.<\/p>\nInformation on getting a visa isn’t something you should be relying on free content for.<\/p>\n
The consequences are serious if you screw it up because the article you read was inaccurate or isn’t relevant to your situation.\u00a0<\/p>\n
We also cover self-employment<\/a> in detail in the course, too!<\/p>\nSave<\/span>Save<\/span><\/p>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.0.6″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”30px||30px||true|false”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2019\/04\/freelancer-health-ins-3.jpg” _builder_version=”4.0.6″ width=”60%” width_tablet=”85%” width_phone=”95%” width_last_edited=”on|phone” module_alignment=”center” border_radii=”on|10px|10px|10px|10px” box_shadow_style=”preset2″ box_shadow_horizontal=”10px” box_shadow_vertical=”10px” box_shadow_blur=”12px” box_shadow_spread=”1px” box_shadow_color=”rgba(0,0,0,0.5)”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Advantages of being freelance” _builder_version=”4.5.7″ text_orientation=”justified” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n
What are the advantages of being a freelancer in Germany?<\/strong><\/h3>\n <\/p>\n
Without going into a lot of detail involving complex and boring legal stuff, the Freie Berufe<\/i> in general are treated more advantageously than other business forms.<\/strong><\/p>\nFirstly, freelance professions do not have to pay the locally administered trade tax<\/a>.<\/strong> Each municipality in Germany is responsible for collecting this, and the amount levied varies from municipality to municipality.<\/p>\nHow much each sole trader business pays is a complex calculation. Also, limited companies, partnerships and joint-stock companies are all subjected to this tax too.<\/p>\n
All you need to know at this stage is, the advantage of not having to pay it i.e. by registering as a profession which qualifies as working freelance in Germany, and thus being exempt, can amount to several thousand Euro if you are running a six-figure business.<\/p>\n
Secondly, the registration process is somewhat more straightforward for professions classed as freelance, as we explain below. Freelancers don’t require a Geweberschein<\/em> from the Gewerbeamt\u00a0<\/em><\/strong>as a first step, before visting the Finanzamt for your business’s tax ID.<\/p>\nThirdly, freelance business are not as mandatory to join their local Chamber of Industry and Commerce (German: Industrie und Handelskammer<\/em>, or IHK for short). Sole-trader businesses have to be members of their local IHK<\/strong>.<\/p>\nThe cost is affordable though: Depending on business turnover, annual membership is likely to only be around EUR 200 maximum unless you are well into 6-figure turnover territory! They also put on plenty of useful events too, so I wouldn’t get too wound up about this relatively small cost.<\/p>\n
Save<\/span>Save<\/span><\/p>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”What jobs are freelance?” _builder_version=”4.0.7″ text_orientation=”justified” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n
Does what I do qualify as working freelance in Germany?<\/strong><\/h3>\n <\/p>\n
So, let\u2019s take a look at some of the job titles and descriptions covered under the definition of freelance professions, according to the German Institute of Freelancers, the\u00a0Institut der Freien Berufe<\/a><\/em>.<\/p>\n\n- Artists<\/li>\n
- Graphic designers<\/li>\n
- Medical professions i.e. doctors, dentists, midwives, practitioners of alternative medicine, psychologists, physiotherapists and occupational therapists<\/li>\n
- Teachers (including Kindergarten \/ Nursery)<\/li>\n
- Coaches<\/li>\n
- Consultants<\/li>\n
- Translators and Interpreters<\/li>\n
- Photographers<\/li>\n
- Authors, writers and journalists (including bloggers, as long as you do not sell other products and services on your website which could be considered as general e-commerce \/ webshop)<\/li>\n
- Authorised experts – for example quality auditors, health & safety inspectors<\/li>\n
- Tax advisors<\/li>\n
- Lawyers and Notaries<\/li>\n
- Architects<\/li>\n
- Engineers – this can also include IT-related professions under certain conditions<\/li>\n<\/ul>\n
Anything which is not covered under these professions is not considered as working freelance in Germany.<\/p>\n
Instead, it is classed as a \u201cstandard\u201d trade, and must be registered as a Gewerbe<\/em>, or sole-trader business, rather than a freiberufliche T\u00e4tigkeit,\u00a0<\/i>or freelance activity.<\/p>\nSave<\/span>Save<\/span><\/p>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”30px||30px||true|false”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2019\/01\/freelance-min.jpg” _builder_version=”4.5.7″ width=”60%” width_tablet=”85%” width_phone=”95%” width_last_edited=”on|phone” module_alignment=”center” border_radii=”on|10px|10px|10px|10px” box_shadow_style=”preset2″ box_shadow_horizontal=”10px” box_shadow_vertical=”10px” box_shadow_blur=”12px” box_shadow_spread=”1px” box_shadow_color=”rgba(0,0,0,0.5)”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Conclusion” _builder_version=”4.0.7″ text_orientation=”justified” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n
What next?<\/strong><\/h3>\n <\/p>\n
This is meant to serve as an overview.<\/p>\n
It doesn’t cover all of the detail required to get your German freelancer visa, learn about all of the tips, tricks and watch-outs and to start your business in Germany.<\/p>\n
This is a much more detailed topic – which is why we put together an\u00a0online course<\/strong>\u00a0 to give everyone access to this valuable content<\/a> at an affordable price!<\/p>\nWhat we have hopefully explained here is the subtle difference in the way that German tax and business formation legislation treats certain professions differently.<\/p>\n
Being considered as a freelancer in Germany rather than a sole trader business \u00a0will definitely result in less bureaucracy and a lower overall tax burden.<\/p>\n
Good luck with your application and with setting up your business!<\/p>\n
<\/p>\n
Disclaimer: This article should only be considered as general information. We’re not qualified to consult and advise on complex legal and tax queries.<\/em><\/p>\nSave<\/span>Save<\/span><\/p>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.5.7″ _module_preset=”default” background_color=”#f8f8f8″ width=”80%” width_tablet=”75%” width_phone=”100%” width_last_edited=”on|tablet” module_alignment=”center” custom_margin=”2vw||||false|false” border_radii=”on|15px|15px|15px|15px” border_width_all=”1px” global_module=”47539″ saved_tabs=”all”][et_pb_row _builder_version=”4.5.7″ _module_preset=”default” custom_margin=”|auto|0px|auto|false|false” custom_padding=”1vw||0vw||false|false”][et_pb_column type=”4_4″ _builder_version=”4.5.7″ _module_preset=”default”][et_pb_text _builder_version=”4.5.7″ _module_preset=”default” custom_margin=”0px||0px||false|false” custom_padding=”1vw||1vw||true|false”]<\/p>\n
Looking for helpful content on another topic?<\/h4>\n
[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”4.5.7″ width=”100%” custom_margin=”1vw||2vw||false|false” custom_padding=”0px|50px|0px|50px|false|false”][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”FINDING A JOB” url=”https:\/\/liveworkgermany.com\/blog\/finding-a-job\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/09\/finding-a-job-1.png” alt=”finding a job in germany” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Finding a Job” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” 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module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/visas-residence-permits\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”%22HOW TO%22 GUIDES” url=”https:\/\/liveworkgermany.com\/blog\/how-to-guides\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/how-to-articles.png” alt=”how to articles” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”How to Articles” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/how-to-guides\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”4.5.7″ width=”100%” custom_margin=”0vw|auto|0vw|auto|true|false” custom_padding=”0px|50px|2vw|50px|false|false”][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”LIFE IN GERMANY” url=”https:\/\/liveworkgermany.com\/blog\/life-in-germany\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/life-in-germany.png” alt=”life in germany” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Life in Germany” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/life-in-germany\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”HEALTHCARE” url=”https:\/\/liveworkgermany.com\/blog\/healthcare\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/healthcare.png” alt=”health insurance in Germany” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Healthcare” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/healthcare\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” 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Self-employment and freelancing is effectively the same thing, right? In Germany, no, it isn\u2019t. The differentiation comes from the way German tax law treats the two separately. There is an important difference here which you need to know if you are considering starting out on your own two feet in Germany rather than taking the […]<\/p>\n","protected":false},"author":1,"featured_media":48479,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"\u00a0\r\n
Working Freelance In Germany And Being Self Employed: The Same Thing?<\/h2>\r\n\u00a0\r\n\r\nBeing self-employed and working freelance in Germany is effectively the same thing, right?\r\n\r\nIn Germany, no, it isn\u2019t.\r\n\r\nThe differentiation comes from the way German tax law treats the two separately. There is an important difference here which you need to know if you are considering starting out on your own two feet in Germany rather than taking the normal route of regular employment.\r\n\r\nWorking freelance in Germany has a subtle and very important different definition to the way we understand the term in English, and this is driven by German tax legislation.<\/strong> There are a certain set of professions known as the Freie Berufe<\/i><\/strong>, roughly translated into English and referred to from hereon in as the freelance professions, which are not subjected to certain rules and regulations of German tax law that other trades must comply with.\r\n\r\n\u00a0\r\n\r\nThis can have a whole range of consequences, ranging from:<\/strong>\r\n\r\n \t- the registration process of your business<\/strong><\/li>\r\n \t
- the amount of tax you pay<\/strong><\/li>\r\n \t
- whether you must join your local Chamber of Industry and Commerce<\/strong><\/li>\r\n \t
- the documentation you have to submit with your tax return<\/strong><\/li>\r\n \t
- and finally, but extremely important for those who are not EU\/EEA citizens (so called Third Country nationals), and are dependent upon their freelance or self-employment activity for their residence permit: This can also impact the amount of time taken to grant your visa and the type of visa you will be granted.<\/strong><\/li>\r\n<\/ul>\r\n\u00a0\r\n\r\nWe do not cover the freelance \/ self-employment visa application process in this article. There is a lot of inaccurate information out there too, so beware. Some particular gems I found were that the freelancer visa is only available in Berlin (absolute rubbish) and that German income tax for the self-employed is 19% (completely untrue). The best 2 articles recounting personal experiences which I could find were this one on self-employment<\/a> and this one for freelancing<\/a>, both written by Americans who have been through the process, as well as this more detailed walk-through of the process<\/a>.\r\n\r\nWe will be putting together some detailed content on visas in future because this is a frequently asked topic, so clearly we need to fill the knowledge gap!\r\n\r\n\u00a0\r\n\r\n
![\"moving](\"https:\/\/liveworkgermany.com\/wp-content\/uploads\/2017\/11\/without-a-job-4-1024x683.jpg\")
<\/a>\r\n\r\n\u00a0\r\nWhat Are The Advantages Of One Form Over Another?<\/strong><\/h3>\r\n\u00a0\r\n\r\nWithout going into a lot of detail involving complex and boring legal stuff, the Freie Berufe<\/i> in general are treated more advantageously than other business forms.<\/strong>\r\n\r\nFirstly, freelance professions do not have to pay the locally administered trade tax.<\/strong> Each municipality in Germany is responsible for collecting this, and the amount levied varies from municipality to municipality. How much each self-employed entrepreneur or sole trader pays is a complex calculation (limited companies, partnerships and joint-stock companies are all subjected to this tax too). All you need to know at this stage is, the advantage of not having to pay it i.e. by registering as a profession which qualifies as working freelance in Germany, and thus being exempt, can amount to several thousand Euro if you are running a six-figure business.\r\n\r\nSecondly, the registration process is somewhat more straightforward, as we explain below. The step of having to register with the Gewerbeamt<\/em> does not apply to freelance professions.\u00a0<\/strong>\r\n\r\nThirdly, freelance business are not required by law to automatically join their local Chamber of Industry and Commerce (German: Industrie und Handelskammer, or IHK for short). Whereas for sole-trader businesses, membership of the IHK is mandatory<\/strong>. The cost is affordable though: Depending on business turnover, annual membership is likely to only be around EUR 200 maximum unless you are well into 6-figure turnover territory!\r\n\r\n\u00a0\r\nDoes What I Do Qualify As Working Freelance In Germany?<\/strong><\/h3>\r\n\u00a0\r\n\r\nSo, let\u2019s take a look at some of the job titles and descriptions covered under the definition of freelance professions, according to the Institut der Freien Berufe<\/a>.\r\n\r\n \t- Medical professions i.e. doctors, dentists, midwives, practitioners of alternative medicine, psychologists, physiotherapists and occupational therapists<\/li>\r\n \t
- Authorised experts - for example quality auditors, health & safety inspectors<\/li>\r\n \t
- Tax advisors<\/li>\r\n \t
- Lawyers and Notaries<\/li>\r\n \t
- Consultants<\/li>\r\n \t
- Architects<\/li>\r\n \t
- Engineers - this can also include IT-related professions under certain conditions<\/li>\r\n \t
- Teachers (including Kindergarten \/ Nursery)<\/li>\r\n \t
- Coaches<\/li>\r\n \t
- Translators and Interpreters<\/li>\r\n \t
- Photographers<\/li>\r\n \t
- Authors, writers and journalists (including bloggers, as long as you do not sell other products and services on your website which could be considered as general e-commerce \/ webshop)<\/li>\r\n \t
- Artists<\/li>\r\n \t
- Graphic designers<\/li>\r\n<\/ul>\r\n\u00a0\r\n\r\nEssentially, anything which is not covered under these professions is not considered as working freelance in Germany. Instead, it is classed as a \u201cstandard\u201d trade, and must be registered as a Gewerbe<\/em>, or sole-trader business, rather than a freiberufliche T\u00e4tigkeit<\/i>.\r\n\r\n\u00a0\r\n\r\n
![\"German](\"https:\/\/liveworkgermany.com\/wp-content\/uploads\/2017\/11\/church-tax-finanzamt-1024x683.jpg\")
<\/a>\r\n\r\n\u00a0\r\nWhat Are The Different Paths To Register My Business?<\/strong><\/h3>\r\n\u00a0\r\n\r\nWhereas something which falls under a freelance profession can be registered easily at the local Finanzamt by filling out a 6-page form, registering a sole-trader business requires a slightly different (and more protracted) route. Provided you can understand German or get a friend to help you complete the forms, registering a freelance business is relatively straightforward. After submitting these to the Finanzamt, you will then receive a unique tax ID for your business usually a couple of weeks later. That\u2019s all - you\u2019re good to go from that point on, unless you are obliged to register with any professional bodies depending on what your line of work is.\r\n\r\nA sole-trader business is registered with the Gewerbeamt in the respective municipality (at city \/ or district level). When these forms have been submitted, the Finanzamt will then (usually) subsequently send you the forms they require to be filled out. These are similar to the forms which are filled out for Freiberufler<\/i> - the only difference being that for sole-trader businesses you cannot do this until you have registered your business with the Gewerbeamt.\r\n\r\nIt is extremely important to note that neither of these types of business formation are limited liability companies.<\/strong> Both freelance professions and standard sole-trader businesses do not enjoy the advantages of being a limited company owner \/ director.\r\n\r\nThe most obvious two examples of this are that you cannot pay yourself a dividend as a tax-effective way of avoiding social security contributions on your salary. More importantly, however, you are fully liable for any claims against your business, and is therefore essential that you take out the necessary liability insurance to cover you against any losses which your private estate would otherwise be liable for.\r\n\r\nSide note - setting up a limited liability company (GmbH) in Germany is considerably less straightforward than in the UK, US and many other European countries because of the amount of starting capital required to do so. Which is why most people decide against it. However, if you are providing B2B services to more traditional businesses, they may well view a GmbH as being somehow a more \"credible\" and established business.\r\n\r\nBoth freelance and sole-trader business formations are also subject to collecting and administering VAT.<\/strong> This is known in German as Mehrwertsteuer<\/i> (MwSt) or the other common term Umsatzsteuer<\/i> (USt). VAT exemption is permitted if the annual turnover of a business was less than EUR 17,500 in the previous year of trading (or projected to be in the first year, in the case of a new business). This in reality is only likely in year 1 of trading, unless the business is run as a part-time, side business or hobby and is not someone\u2019s main source of income.\r\n\r\n\u00a0\r\n\r\nThis is meant to serve as an overview only and deliberately does not go into detail regarding the different steps taken to start a business in Germany. This is a much more detailed topic and is beyond the scope of this article.\r\n\r\nWhat we hopefully have explained here is the subtle difference in the way that German tax and business formation legislation treats certain professions. In that regard, the professions which are granted a more favourable status through being defined as Freie Berufe <\/i>mean less bureaucracy and also lower tax bills.\r\n\r\n\u00a0\r\n\r\nDisclaimer: This article should only be considered general information. If you have specific questions on what type of business form you need to register as, we strongly recommend you seek out a lawyer or tax advisor. Live Work Germany is not qualified to consult and advise on these matters.<\/em><\/strong>\r\n\r\nSave<\/span>Save<\/span>Save<\/span>Save<\/span>\r\n\r\nSave<\/span>Save<\/span>","_et_gb_content_width":""},"categories":[261],"tags":[199],"_links":{"self":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts\/25987"}],"collection":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/comments?post=25987"}],"version-history":[{"count":24,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts\/25987\/revisions"}],"predecessor-version":[{"id":48515,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts\/25987\/revisions\/48515"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/media\/48479"}],"wp:attachment":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/media?parent=25987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/categories?post=25987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/tags?post=25987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
There are a certain set of professions known as the Freie Berufe<\/i><\/strong>, roughly translated as the freelance professions<\/strong><\/em>, which is what we’ll call them from hereon in.<\/p>\n These professions are not subjected to certain rules and regulations of German tax law that other trades (which we’ll refer to as self-employment or sole trader businesses) must comply with.<\/p>\n This can have a whole range of consequences, ranging from:<\/p>\n We do not cover the freelance \/ self-employment visa application process in this article. There is a lot of inaccurate information out there on the interwebs too, so beware…<\/p>\n Some particular gems I found were:<\/p>\n If you’re serious about applying for this visa and want to save yourself the cost of hiring a consultant, as well as the worry of dependency on blogs and YouTube, I strongly recommend our online course<\/a><\/strong> all about how to get the German Freelance Visa.<\/p>\n Information on getting a visa isn’t something you should be relying on free content for.<\/p>\n The consequences are serious if you screw it up because the article you read was inaccurate or isn’t relevant to your situation.\u00a0<\/p>\n We also cover self-employment<\/a> in detail in the course, too!<\/p>\n Save<\/span>Save<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.0.6″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”30px||30px||true|false”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2019\/04\/freelancer-health-ins-3.jpg” _builder_version=”4.0.6″ width=”60%” width_tablet=”85%” width_phone=”95%” width_last_edited=”on|phone” module_alignment=”center” border_radii=”on|10px|10px|10px|10px” box_shadow_style=”preset2″ box_shadow_horizontal=”10px” box_shadow_vertical=”10px” box_shadow_blur=”12px” box_shadow_spread=”1px” box_shadow_color=”rgba(0,0,0,0.5)”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Advantages of being freelance” _builder_version=”4.5.7″ text_orientation=”justified” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n <\/p>\n Without going into a lot of detail involving complex and boring legal stuff, the Freie Berufe<\/i> in general are treated more advantageously than other business forms.<\/strong><\/p>\n Firstly, freelance professions do not have to pay the locally administered trade tax<\/a>.<\/strong> Each municipality in Germany is responsible for collecting this, and the amount levied varies from municipality to municipality.<\/p>\n How much each sole trader business pays is a complex calculation. Also, limited companies, partnerships and joint-stock companies are all subjected to this tax too.<\/p>\n All you need to know at this stage is, the advantage of not having to pay it i.e. by registering as a profession which qualifies as working freelance in Germany, and thus being exempt, can amount to several thousand Euro if you are running a six-figure business.<\/p>\n Secondly, the registration process is somewhat more straightforward for professions classed as freelance, as we explain below. Freelancers don’t require a Geweberschein<\/em> from the Gewerbeamt\u00a0<\/em><\/strong>as a first step, before visting the Finanzamt for your business’s tax ID.<\/p>\n Thirdly, freelance business are not as mandatory to join their local Chamber of Industry and Commerce (German: Industrie und Handelskammer<\/em>, or IHK for short). Sole-trader businesses have to be members of their local IHK<\/strong>.<\/p>\n The cost is affordable though: Depending on business turnover, annual membership is likely to only be around EUR 200 maximum unless you are well into 6-figure turnover territory! They also put on plenty of useful events too, so I wouldn’t get too wound up about this relatively small cost.<\/p>\n Save<\/span>Save<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”What jobs are freelance?” _builder_version=”4.0.7″ text_orientation=”justified” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n <\/p>\n So, let\u2019s take a look at some of the job titles and descriptions covered under the definition of freelance professions, according to the German Institute of Freelancers, the\u00a0Institut der Freien Berufe<\/a><\/em>.<\/p>\n Anything which is not covered under these professions is not considered as working freelance in Germany.<\/p>\n Instead, it is classed as a \u201cstandard\u201d trade, and must be registered as a Gewerbe<\/em>, or sole-trader business, rather than a freiberufliche T\u00e4tigkeit,\u00a0<\/i>or freelance activity.<\/p>\n Save<\/span>Save<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”30px||30px||true|false”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2019\/01\/freelance-min.jpg” _builder_version=”4.5.7″ width=”60%” width_tablet=”85%” width_phone=”95%” width_last_edited=”on|phone” module_alignment=”center” border_radii=”on|10px|10px|10px|10px” box_shadow_style=”preset2″ box_shadow_horizontal=”10px” box_shadow_vertical=”10px” box_shadow_blur=”12px” box_shadow_spread=”1px” box_shadow_color=”rgba(0,0,0,0.5)”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Conclusion” _builder_version=”4.0.7″ text_orientation=”justified” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n <\/p>\n This is meant to serve as an overview.<\/p>\n It doesn’t cover all of the detail required to get your German freelancer visa, learn about all of the tips, tricks and watch-outs and to start your business in Germany.<\/p>\n This is a much more detailed topic – which is why we put together an\u00a0online course<\/strong>\u00a0 to give everyone access to this valuable content<\/a> at an affordable price!<\/p>\n What we have hopefully explained here is the subtle difference in the way that German tax and business formation legislation treats certain professions differently.<\/p>\n Being considered as a freelancer in Germany rather than a sole trader business \u00a0will definitely result in less bureaucracy and a lower overall tax burden.<\/p>\n Good luck with your application and with setting up your business!<\/p>\n <\/p>\n Disclaimer: This article should only be considered as general information. We’re not qualified to consult and advise on complex legal and tax queries.<\/em><\/p>\n Save<\/span>Save<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.5.7″ _module_preset=”default” background_color=”#f8f8f8″ width=”80%” width_tablet=”75%” width_phone=”100%” width_last_edited=”on|tablet” module_alignment=”center” custom_margin=”2vw||||false|false” border_radii=”on|15px|15px|15px|15px” border_width_all=”1px” global_module=”47539″ saved_tabs=”all”][et_pb_row _builder_version=”4.5.7″ _module_preset=”default” custom_margin=”|auto|0px|auto|false|false” custom_padding=”1vw||0vw||false|false”][et_pb_column type=”4_4″ _builder_version=”4.5.7″ _module_preset=”default”][et_pb_text _builder_version=”4.5.7″ _module_preset=”default” custom_margin=”0px||0px||false|false” custom_padding=”1vw||1vw||true|false”]<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”4.5.7″ width=”100%” custom_margin=”1vw||2vw||false|false” custom_padding=”0px|50px|0px|50px|false|false”][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”FINDING A JOB” url=”https:\/\/liveworkgermany.com\/blog\/finding-a-job\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/09\/finding-a-job-1.png” alt=”finding a job in germany” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Finding a Job” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/finding-a-job\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_color__hover=”rgba(251,219,71,0.5)” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”RESIDENCE PERMITS” url=”https:\/\/liveworkgermany.com\/blog\/visas-residence-permits\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/visas-and-residence-permits.png” alt=”visas and residence permits” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Visas” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/visas-residence-permits\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”%22HOW TO%22 GUIDES” url=”https:\/\/liveworkgermany.com\/blog\/how-to-guides\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/how-to-articles.png” alt=”how to articles” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”How to Articles” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/how-to-guides\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”4.5.7″ width=”100%” custom_margin=”0vw|auto|0vw|auto|true|false” custom_padding=”0px|50px|2vw|50px|false|false”][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”LIFE IN GERMANY” url=”https:\/\/liveworkgermany.com\/blog\/life-in-germany\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/life-in-germany.png” alt=”life in germany” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Life in Germany” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/life-in-germany\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”HEALTHCARE” url=”https:\/\/liveworkgermany.com\/blog\/healthcare\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/healthcare.png” alt=”health insurance in Germany” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Healthcare” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/healthcare\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.26.3″ custom_padding=”|15px||15px|false|false”][et_pb_blurb title=”HOUSING” url=”https:\/\/liveworkgermany.com\/blog\/housing\/” image=”https:\/\/liveworkgermany.com\/wp-content\/uploads\/2020\/10\/housing.png” alt=”apartments in Germany” image_max_width=”50%” image_max_width_tablet=”50%” image_max_width_phone=”60%” image_max_width_last_edited=”on|phone” admin_label=”Housing” _builder_version=”4.5.7″ header_font_size=”16px” background_enable_color=”off” text_orientation=”center” width=”100%” max_width=”100%” module_alignment=”center” custom_margin=”|10px||10px|false|true” custom_margin_tablet=”||5vw||false|true” custom_margin_phone=”|10px|7vw|10px|false|true” custom_margin_last_edited=”on|phone” custom_padding=”5px|10px|5px|10px|true|true” link_option_url=”https:\/\/liveworkgermany.com\/blog\/housing\/” z_index_tablet=”500″ border_radii=”on|10px|10px|10px|10px” border_width_all=”1px” border_color_all=”#4d4d4d” background_enable_color__hover=”on” background__hover_enabled=”on|hover”][\/et_pb_blurb][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Self-employment and freelancing is effectively the same thing, right? In Germany, no, it isn\u2019t. The differentiation comes from the way German tax law treats the two separately. There is an important difference here which you need to know if you are considering starting out on your own two feet in Germany rather than taking the […]<\/p>\n","protected":false},"author":1,"featured_media":48479,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"\u00a0\r\n\n
\n
What are the advantages of being a freelancer in Germany?<\/strong><\/h3>\n
Does what I do qualify as working freelance in Germany?<\/strong><\/h3>\n
\n
What next?<\/strong><\/h3>\n
Looking for helpful content on another topic?<\/h4>\n
Working Freelance In Germany And Being Self Employed: The Same Thing?<\/h2>\r\n\u00a0\r\n\r\nBeing self-employed and working freelance in Germany is effectively the same thing, right?\r\n\r\nIn Germany, no, it isn\u2019t.\r\n\r\nThe differentiation comes from the way German tax law treats the two separately. There is an important difference here which you need to know if you are considering starting out on your own two feet in Germany rather than taking the normal route of regular employment.\r\n\r\nWorking freelance in Germany has a subtle and very important different definition to the way we understand the term in English, and this is driven by German tax legislation.<\/strong> There are a certain set of professions known as the Freie Berufe<\/i><\/strong>, roughly translated into English and referred to from hereon in as the freelance professions, which are not subjected to certain rules and regulations of German tax law that other trades must comply with.\r\n\r\n\u00a0\r\n\r\nThis can have a whole range of consequences, ranging from:<\/strong>\r\n
\r\n \t
<\/a>\r\n\r\n\u00a0\r\nWhat Are The Advantages Of One Form Over Another?<\/strong><\/h3>\r\n\u00a0\r\n\r\nWithout going into a lot of detail involving complex and boring legal stuff, the Freie Berufe<\/i> in general are treated more advantageously than other business forms.<\/strong>\r\n\r\nFirstly, freelance professions do not have to pay the locally administered trade tax.<\/strong> Each municipality in Germany is responsible for collecting this, and the amount levied varies from municipality to municipality. How much each self-employed entrepreneur or sole trader pays is a complex calculation (limited companies, partnerships and joint-stock companies are all subjected to this tax too). All you need to know at this stage is, the advantage of not having to pay it i.e. by registering as a profession which qualifies as working freelance in Germany, and thus being exempt, can amount to several thousand Euro if you are running a six-figure business.\r\n\r\nSecondly, the registration process is somewhat more straightforward, as we explain below. The step of having to register with the Gewerbeamt<\/em> does not apply to freelance professions.\u00a0<\/strong>\r\n\r\nThirdly, freelance business are not required by law to automatically join their local Chamber of Industry and Commerce (German: Industrie und Handelskammer, or IHK for short). Whereas for sole-trader businesses, membership of the IHK is mandatory<\/strong>. The cost is affordable though: Depending on business turnover, annual membership is likely to only be around EUR 200 maximum unless you are well into 6-figure turnover territory!\r\n\r\n\u00a0\r\n
Does What I Do Qualify As Working Freelance In Germany?<\/strong><\/h3>\r\n\u00a0\r\n\r\nSo, let\u2019s take a look at some of the job titles and descriptions covered under the definition of freelance professions, according to the Institut der Freien Berufe<\/a>.\r\n
\r\n \t
<\/a>\r\n\r\n\u00a0\r\nWhat Are The Different Paths To Register My Business?<\/strong><\/h3>\r\n\u00a0\r\n\r\nWhereas something which falls under a freelance profession can be registered easily at the local Finanzamt by filling out a 6-page form, registering a sole-trader business requires a slightly different (and more protracted) route. Provided you can understand German or get a friend to help you complete the forms, registering a freelance business is relatively straightforward. After submitting these to the Finanzamt, you will then receive a unique tax ID for your business usually a couple of weeks later. That\u2019s all - you\u2019re good to go from that point on, unless you are obliged to register with any professional bodies depending on what your line of work is.\r\n\r\nA sole-trader business is registered with the Gewerbeamt in the respective municipality (at city \/ or district level). When these forms have been submitted, the Finanzamt will then (usually) subsequently send you the forms they require to be filled out. These are similar to the forms which are filled out for Freiberufler<\/i> - the only difference being that for sole-trader businesses you cannot do this until you have registered your business with the Gewerbeamt.\r\n\r\nIt is extremely important to note that neither of these types of business formation are limited liability companies.<\/strong> Both freelance professions and standard sole-trader businesses do not enjoy the advantages of being a limited company owner \/ director.\r\n\r\nThe most obvious two examples of this are that you cannot pay yourself a dividend as a tax-effective way of avoiding social security contributions on your salary. More importantly, however, you are fully liable for any claims against your business, and is therefore essential that you take out the necessary liability insurance to cover you against any losses which your private estate would otherwise be liable for.\r\n\r\nSide note - setting up a limited liability company (GmbH) in Germany is considerably less straightforward than in the UK, US and many other European countries because of the amount of starting capital required to do so. Which is why most people decide against it. However, if you are providing B2B services to more traditional businesses, they may well view a GmbH as being somehow a more \"credible\" and established business.\r\n\r\nBoth freelance and sole-trader business formations are also subject to collecting and administering VAT.<\/strong> This is known in German as Mehrwertsteuer<\/i> (MwSt) or the other common term Umsatzsteuer<\/i> (USt). VAT exemption is permitted if the annual turnover of a business was less than EUR 17,500 in the previous year of trading (or projected to be in the first year, in the case of a new business). This in reality is only likely in year 1 of trading, unless the business is run as a part-time, side business or hobby and is not someone\u2019s main source of income.\r\n\r\n\u00a0\r\n\r\nThis is meant to serve as an overview only and deliberately does not go into detail regarding the different steps taken to start a business in Germany. This is a much more detailed topic and is beyond the scope of this article.\r\n\r\nWhat we hopefully have explained here is the subtle difference in the way that German tax and business formation legislation treats certain professions. In that regard, the professions which are granted a more favourable status through being defined as Freie Berufe <\/i>mean less bureaucracy and also lower tax bills.\r\n\r\n\u00a0\r\n\r\nDisclaimer: This article should only be considered general information. If you have specific questions on what type of business form you need to register as, we strongly recommend you seek out a lawyer or tax advisor. Live Work Germany is not qualified to consult and advise on these matters.<\/em><\/strong>\r\n\r\nSave<\/span>Save<\/span>Save<\/span>Save<\/span>\r\n\r\nSave<\/span>Save<\/span>","_et_gb_content_width":""},"categories":[261],"tags":[199],"_links":{"self":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts\/25987"}],"collection":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/comments?post=25987"}],"version-history":[{"count":24,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts\/25987\/revisions"}],"predecessor-version":[{"id":48515,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/posts\/25987\/revisions\/48515"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/media\/48479"}],"wp:attachment":[{"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/media?parent=25987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/categories?post=25987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/liveworkgermany.com\/wp-json\/wp\/v2\/tags?post=25987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}