So you are self-employed in 2019 as a freelancer
Freelancers enjoy a certain special status among the self-employed and are clearly different from tradespeople.
But why is that? And what exactly is special about freelancing?
What is a freelancer?
Freelancers, like tradespeople, are self-employed persons who carry out a professional activity on their own responsibility and not as employees. However, they are not subject to the Industrial Code, but are considered a kind of special case.
It is generally assumed that freelancers pursue a scientific, artistic, teaching, educational or literary activity, which makes them all service providers. This is fundamentally different from the traders.
Anyone who is classified as a freelancer and who has yet to register a trade, ultimately decides each tax office in each case. It usually refers to §18 EStG and §1 PartGG.
The latter states: “The liberal professions generally have personal, autonomous and professionally independent provision of higher-quality services in the interests of the clients and the general public on the basis of special professional qualifications or creative gifts.”
Important: Many of the liberal professions – for example doctor, lawyer, notary and alternative practitioner – require special education and / or degrees. However, others – such as the translator, journalist and image reporter – are not considered protected in Germany and may therefore be exercised by anyone – even without a corresponding degree.
Registration as a freelancer at the tax office
Fortunately, it is quite easy to register as a freelancer at the tax office. Here you will learn how to do it.
Step 1: Check if you have the status “freelancer”
Before you begin with the next steps, you should first of all clarify whether you really are freelancers or not.
In times of digitization, there are many borderline and disputes that can not be clearly classified in one of the categories freelance or commercial.
Only when it is clear that the status is really awarded to you, it is worth taking further steps.
Step 2: Send an informal letter to your tax office
The next step is to write an informal letter to the tax office. It should contain the following information:
- your name and contact information
- the job you want to do as a freelancer
- the request for the allocation of a tax number
Step 3: Prove your professional qualification
As can be read in PartGG §1 Abs. 2, a freelance activity is based on a “special professional qualification or creative talent”, which of course also has to be proven.
In plain language, this means that you have to submit documents to the tax office that prove your professional aptitude. These may be, for example, certificates, diplomas and diplomas, but also, for example, job references.
You can hand in the corresponding proof either on request or send it directly to the tax office with your informal letter. We recommend the second option, as it saves you some time.
Step 4: Complete the questionnaire for taxation
Although this questionnaire looks quite daunting for the tax authorities, it is a reason to be happy. Because if you received it, it means: The tax office has recognized your freelancer status and is willing to issue you a tax number.
But before that happens, you first have to complete the questionnaire for taxation truthfully and completely and send it back to the tax office.
Tip: On the Internet you will find a number of filling aids for the questionnaire for tax collection. However, if you really want to play it safe, we advise you to complete the document together with your accountant.
Step 5: Wait for your tax code and go
Now nothing speaks against taking up your activity.
Even if you have not received a tax code yet, you can already go about your job and even write bills. Note, however, that you mention to your customers that a tax number has been requested and will be submitted later.
Good to know: As a freelancer, you do not have to register for a business. Even a visit to the notary, the entry in the commercial register and a membership in the IHK or HWK are aspects that you can delete in the course of your freelance with a clear conscience from the agenda.
Business account for freelancers
If you want to become self-employed as a freelancer, you should of course start thinking about your finances as early as possible. Our recommendation for you: Separate your private budget from business from the beginning and use a separate business account.
Which business account is particularly well-suited, you can find out with the help of this overview:
Taxes for freelancers
As a freelancer you have to pay taxes like other self-employed.
Basically these are these taxes:
- income tax
- value added tax
- solidarity surcharge
Important to know: freelancers are not automatically exempt from VAT. If you want a corresponding exemption, you must make use of the small business rules.
Other taxes that you may have to pay as a freelancer are the
- Wage tax (if you employ employees)
- Church tax (if you are a member of the protestant or catholic church)
A tax that freelancers basically do not have to pay is the trade tax.
Accounting for freelancers
Freelancers enjoy certain privileges not only with regard to taxes to be paid. Even when it comes to bookkeeping, it quickly becomes clear that the status of self-employment really pays off.
As a freelancer, you are fundamentally not accountable. As a rule, it is sufficient for the tax office to attach an income surplus invoice (EÜR) to your income tax return.
It only changes when you found a corporation or make very high profits.
Advantages and disadvantages for freelancers
At this point it should already be clear: Freelancers will bring some pretty interesting benefits. But you should also necessarily know with what disadvantages this status is linked.
Advantages of freelancing
- no trade tax
- Profit determination using the EÜR
- no accounting obligation
- simple registration process
Disadvantages of freelancing
- Restrictions on the activity performed
- Suitability must be proven
- possibly lower reputation as a trader
- Unlimited liability
The catalog professions of freelancers
The list of professions in §18 EStG is often referred to as a catalog. This in turn means that the typical activities are also called catalog professions.
- Doctors, Dentists, Veterinarians
- Lawyers, notaries, patent attorneys
- Surveyors, engineers
- Architects
- commercial chemist
- Auditors, tax consultants, advisory economists and business economists
- sworn auditors, authorized representatives
- Naturopaths, Dentists, physiotherapists
- Journalists, image reporters
- Interpreters, translators
- guide
- and similar professions
The addition “and similar occupations” makes it clear that this list of freelancers is by no means complete. It can be supplemented with many other activities.
If you are not sure whether you qualify as a freelancer or not, it makes the most sense to contact the tax office responsible for you. There you will look closely at your case and decide whether you are entitled to the freelancer status or whether you have yet to register a trade.
Typical disputes include graphic designers, IT professionals and coaches.
frequently asked Questions
If you want to become a freelancer, zigzagefully questions through your head.
The appropriate answers can be found here.
What is the difference between freelancer and freelancer
Anyone who informs themselves about freelance issues in the internet will inevitably come across the term “freelancer” over and over again. The assumption that this is the English translation is obvious – but it is wrong.
In fact, freelancers and freelancers (also called “freelancers”) refer to two different forms of professional activity.
While a freelancer works scientifically, artistically, teaching, educational or literary, a freelancer is primarily characterized by his project-related work for different clients.
What legal form can a freelancer choose?
The freelancer is not an independent legal form, but can only be understood as a kind of special status.
If you want to be self-employed on your own, you will automatically start a sole proprietorship.
If you associate with other freelancers, you can start a GbR or a partnership.
In addition, you also have the opportunity to found a corporation – for example, a GmbH or UG (limited liability). In this case, however, the privilege of paying no business tax and double-entry bookkeeping expires.
When do you have to register as a freelancer??
As a freelancer you are obliged to report to the tax office no later than four weeks after taking up your job.
If you do not do that, sanctions are imminent.
When does a freelancer have to register a trade?
The boundaries between freelancing and business are often fluid and must therefore be handled with the utmost care.
For example, if you work as a freelance journalist and blogger and generate (among others) money through advertising revenue, you’ll need to sign up for a trade. If you do not do that, the tax office can revoke your freelance status retrospectively. This in turn goes hand in hand with partly high trade tax back payments, which in the worst case are existence-threatening for you.
Furthermore, the registration of a trade is unavoidable, if you do not want to stick with your private property. In that case, you have to set up a corporation – and this is definitely a trade.
By the way: Of course you can also be both a freelancer and a tradesman. Then it is important that you clearly distinguish your activities from one another and also with regard to accounting.
When are freelancers accountable?
Basically freelancers are not accountable. The tax office is satisfied if they submit an income surplus bill as part of their income tax return.
An accounting obligation arises only when a freelancer founds a trade. Another exceptional case occurs when you make at any time extremely high turnover or profit per year and the tax office therefore requires a double-entry bookkeeping from you.
Why do freelancers pay no trade tax?
The trade tax is a tax that goes directly to the municipality in which a company is registered. The money is u.a. used to maintain and expand the local infrastructure.
The fact that freelancers do not have to pay any trade tax is based on the assumption that – unlike tradespeople – they do not burden the infrastructure with heavy machinery and vehicles.
How long do freelancers have to keep tax records??
The general retention requirement for tax documents is 10 years.
How are freelancers health insurance?
You have the choice between private health insurance and voluntary statutory insurance.
If you are a freelance artist or publicist (eg journalist or author), it is also advisable to inform you in more detail about the artist social fund. This takes over (almost like an employer) about half of your health insurance contributions.
Can a freelancer hire people?
Yes, you have the opportunity to employ employees. The best evidence of this is probably provided by doctors and lawyers who would not be able to work without a well-functioning and specialized team.
When does a freelancer not have to pay sales tax?
To be tax exempt as a freelancer, you need to make use of the small business rules.
However, this only applies if your annual turnover is less than 17,500 euros. In the early days this may be a realistic sum, but if your business is to grow continuously, small business regulation is more of a brake than a relief.
What can be deducted as a freelancer from the tax?
Freelancers, like other self-employed people, can deduct much of the tax – that means: the tax paid on certain products and services can be refunded by the tax office.
Classic items that are “deductible” include, among others:
- study materials
- work equipment
- office
- Company car / bike
- used services related to your freelancing
- business
Who can become a freelancer?
In principle, anyone can become a freelancer – provided that he or she fulfills the relevant requirements. While prospective physicians, naturopaths and lawyers must provide relevant certificates, for example, a freelance image reporter should be able to provide appropriate practical evidence.
What exactly is required for admission depends on the profession. Some of the catalog professions are protected in Germany, others are not.
Can one become a freelancer even without a degree??
Yes, in the case of most unprotected catalog professions (such as journalists and translators) this is possible.
Summary
Above all, the abolition of trade tax and the prospects for the EÜR ensure that the status of freelancer is very popular among many founders.
A freelance certainly has certain advantages – but must always be regarded as a kind of limitation. Not every (promising) business idea can be realized with it.
Please rate this entry:
Click on the star to rate
Average rating 4.6 / 5. Number of votes: 14
Please share the post, if he has helped you:
Jessika is a freelance blogger and author who has specialized in careers and entrepreneurship throughout her career. She is particularly interested in creative startups, which are different from the "mainstream" stand out and dare to be different from the others. In her articles, Jessika likes to incorporate her own experiences – for example with coworking. You can find more about Jessika on our About us page.
Related Posts
-
Supplementary dental insurance: comparison of the current test winner
Dental supplement insurance comparison: Overview of benefits and tariff details Fast to the goal: For many, dental health is high on the list of…
-
Telescopes dentures berlin »dentists’ office dr
Telescopes Dentures – what is it?? Behind the term telescopes dentures hide so-called telescopic prostheses. This combination of crown and denture tooth,…
-
Save up to 80% the cost of your dentures Request now free guides incl. 4 addresses of dentists in your area. Dentures – to bite, nice and feel good Which…
-
Stop gingival retraction, gum recession, dr
Stop gum decline and gum recession Of the Decline of the gums (gingival recession) is one of the dreaded diagnoses when visiting a dentist. In addition,…