Someone who wants to become self-employed in Germany has to answer quite a few questions for the tax office (Finanzamt). One of the most important ones is whether you will pursue a freelance or trade activity (Freiberufler or Gewerbe) and the answer to that is not always straightforward.<\/p>\n\n\n\n
In this guide, we provide an overview of what distinguishes freelancers from trade persons in Germany and list some of the jobs that are most difficult to classify, because the classification often depends on small details.<\/p>\n\n\n\n
Here’s what it’s about:<\/p>\n\n\n\n
Before starting your self-employment, you should already know whether you are considered a Freiberufler (freelancer) or a Gewerbetreibender (trade person), as this determines how you officially need to register your new professional path.<\/p>\n\n\n\n
However, not only does the registration of your activity depend on the classification into one of these categories, but the taxes you ultimately have to pay also directly correlate with whether you are classified as a Freiberufler or a Gewerbe.<\/p>\n\n\n\n
Whether you are a Freiberufler or a Gewerbe is not something you can simply choose.<\/p>\n\n\n\n
In order to register as self-employed in Germany, you have to submit the official form called Fragebogen zur steuerlichen Erfassung<\/a>. In this form, you name the job you want to become self-employed with and describe the activity. You also have to fill in wether you are Freiberufler or Gewerbe. However, if the Finanzamt disagrees with your choice, they will simply register you under the other status. You will be informed of the final decision via the letter you get from your Finanzamt<\/a>. <\/p>\n\n\n\n In the Income Tax Act, you will find the following definition for a Freiberufler:<\/p>\n\n\n\n “Freelance activity includes independently exercised scientific, artistic, literary, teaching, or educational activities [\u2026]” \u00a71 8 para. 1 No.1 Income Tax Act.<\/p>\n\n\n\n In general, all jobs that\u2026<\/p>\n\n\n\n \u2026offer a service (and not goods) This sounds quite logical and easy to apply at first. If your job falls into one of the mentioned categories, you just have to fill out the ‘Fragebogen zur steuerlichen Erfassung<\/a>” (questionnaire for tax registration) and can start your new freelance job as soon as you receive your new tax number.<\/p>\n\n\n\n For Gewerbetreibende, the official definition is a bit more complicated. It states:<\/p>\n\n\n\n “An independent, sustainable activity<\/strong> undertaken with the intention of making a profit<\/strong> and representing participation in general economic market is a business operation, if the activity is neither to be considered as the practice of agriculture and forestry nor as the practice of a free profession nor as another independent work.” \u00a7 15 para. 2 Income Tax Act.<\/p>\n\n\n\n Generally, if you find yourself in this explanation, then you must register a Gewerbe. To do this, you fill out the aforementioned questionnaire for tax registration. Additionally, you need to register with the local trade office.<\/p>\n\n\n\n \ud83d\udca1Good to know:<\/strong> Registration with the trade office is associated with a fee, which currently ranges from \u20ac20 to \u20ac65, depending on your region.<\/p>\n\n\n\n \u27a1\ufe0f Don’t know how to fill out the trade registration? Here’s a step-by-step guide<\/a>!<\/p>\n\n\n\n Another difference between Freiberufler and Gewerbe is that you have to pay Gewerbesteuer<\/strong> (trade tax) for operating a Gewerbe. The amount of trade tax is calculated based on the so-called multiplier, which varies from municipality to municipality. So, once again, the location of your business plays a crucial role.<\/p>\n\n\n\nThis is what defines a Freiberufler:<\/h3>\n\n\n\n
\u2026require personal expertise (e.g., through a degree or training)
\u2026are performed independently and in a managerial capacity<\/p>\n\n\n\nThis is what defines a Gewerbe:<\/h3>\n\n\n\n