The guide you provided offers a detailed roadmap for starting a freelance career in Germany, from legal classification to tax obligations, and highlights the benefits and freedoms of freelancing there. Here are the key takeaways and essential steps for becoming a freelancer in Germany:
*Please be aware that we do not update this information in real time, so you should verify that the law has not changed recently.
Who can freelance: EU citizens and residents of Norway, Switzerland, Iceland, and Liechtenstein can live and freelance without a visa. Non-EU citizens may require a visa and residence permit.
Freelance Status (Freiberufler) vs. Trade/Business (Gewerbe): Freelancers (e.g., artists, writers, engineers, doctors) benefit from fewer taxes and less regulation than tradespeople, who must register with the Gewerbeamt (Business Registration Authority) and pay additional taxes. The local tax office (Finanzamt) ultimately decides who qualifies as a freelancer.
Register Your Address: Begin by registering your address with the local Foreigner’s Office, providing documents like a rental contract, registration form, and ID.
Tax Registration: After registering your address, you’ll receive a personal tax ID. Then, file a Questionnaire for Taxation (Fragenbogen zur steuerliche Erfassung) with the local tax office, detailing bank accounts, freelance activity, estimated income, and VAT choice.
VAT Registration: Freelancers earning less than €22,000 in their first year can choose whether to charge VAT (USt). Once decided, this choice remains for five years. If charging VAT, freelancers submit VAT payments based on income thresholds.
Tax Payments: Taxes may be due monthly, quarterly, or annually depending on estimated income. Freelancers must also submit an annual income tax return, where overpayments are refunded, or shortfalls are paid.
Invoicing: German invoices must include specific details (e.g., tax number, VAT rate, client details, service description) and be kept on record for 10 years.
Record-Keeping: Freelancers are obligated to maintain records such as bank statements, invoices, and contracts to comply with audit requirements.
Health Insurance: Health insurance is mandatory. Freelancers may contribute to either a statutory plan (14.6% of income) or a private plan, which could be cheaper for some.
Pension Contributions: Freelancers can opt for a voluntary pension. Those in creative fields may qualify for reduced contributions through the Künstlersozialkasse (KSK).
Register your address and obtain tax ID
Set up a dedicated business bank account
Decide on your legal classification (Freiberufler or Gewerbe)
Complete the tax questionnaire and register with Finanzamt
Obtain any necessary residency permits
Establishing a freelance business in Germany involves multiple steps and adherence to specific regulations, but once set up, it provides the opportunity to work independently and enjoy a flexible work-life balance.