How to get started and become a freelancer in Germany

A little over 2 years ago, i decided to quit my job to become self-employed in Germany. After years spent in the cosy realm of full-time employment, i took a leap into completely uncharted territories for me. I was excited, i was motivated and with no regrets. Soon thereafter however, i was facing a little mountain called bureaucracy. To become a freelancer in Germany was not going to be easy but with my best efforts and a little help, i did go through that challenge unharmed. This guide is an attempt at transferring my experience to spare you some sweat, tears and stress.

How to become a freelancer in Germany

Disclaimer: Please note that this is an attempt at covering an excessively broad topic. You might want to prepare a cup of tea before diving in. It’s a whale of a read.

 

The difference between freelancer & self-employed: which one are you?

Before worrying about documents, registration, taxes and so on, you will need to understand the difference between being a freelancer and being self-employed in Germany. Although it does sound similar, there are pretty substantial differences between the two. Self-employment can be divided into 2 broad categories:

  • Freiberuflich or freelancer: it is one specific type of self-employment that is limited to only a certain number of liberal occupations. Those professions are often linked to some sort of scholar, academic or creative service, as defined in income tax law here (EStG § 18). Those can range from dancers to doctors, from architects to journalists, from lawyers to programmers. Freelancing in Germany does not require to register a business which involves less paperwork.
  • Gewerbetreibende or tradesman/business: this is linked to all other kinds of occupations that don’t qualify for the official freelancer definition. Any other sort of commercial entreprise usually falls under the classification of business in Germany. Most often than not, it is about building, trading or selling physical stuff. In this case, you will need to register a business (Gewerbe), which explains why the term “Gewerbetreibende” is used to differentiate this category.

 

Registration for freelancers in GermanyEverything around registration

In that part, i will assume all that you have already cleared the following things:

If not, just click on the link for each topic. It will redirect you to another guide on this blog.

Registering as a freelancer in Germany

Registering as a freelancer in Germany is a fairly straightforward process as it doesn’t involve registering a corporation or getting trade permits. However, please hold in mind that some occupations will require a specific degree to be able to do freelancing in that field.

All you need to do is to:

  • Fill in this form (Fragebogen zur steuerliche Erfassung). It’s a small questionnaire to let your Finanzamt know that you plan to become a freelancer in Germany. You can fill-it online, save it or print it when you are done. If your German is a bit sketchy, you can use this little guide or get help from a German friend.
  • Bring it to your local Finanzamt. If unsure, which one is yours, you can check this here.
  • Receive your new tax-ID (Steuernummer), which you will put on all your bills from now on.

Registering as self-employed in Germany (Gewerbetreibende)

As the name suggests, you will need to register a Gewerbe (a business) at your local Gewerbeamt (Trade office). Please note that in this case, you will need to register your Gewerbe before going to your Finanzamt. The process at the Finanzamt is then the same as mentioned above for freelancers. This is also fairly easy, especially if your status is going to be Einzelunternehmer (Sole proprietorship). You will need to bring the following with you at the Gewerbeamt:

  • A valid ID document or passport
  • Your Meldebescheinigung (adress registration certificate)
  • The filled-out Gewerbe-Anmeldung form available on your city’s local platform. (Links for BerlinHamburgMunichFrankfurt)
  • Between ten and forty euros for the registration fee

Additional pieces could be health or regulatory permits (for opening a café for example), certificate from trade offices if you are going into a particular skilled craft sector or if working with children, a certificate that you don’t have a criminal record. If you are unsure about this, get in touch with your local Industrie- und Handelskammer – IHK (Chamber of commerce); they will tell you about all the permits you need for your activity.

I’m not covering here other business structures such as UG, GmbH or GbR as this post is aiming at one-man businesses and at how to become a freelancer in Germany. It usually requires to go in front of a lawyer to establish the corporation, and registration at the local IHK first (Handelsregister).

 

Health insurance self-employment in Germany

Everything around health insurance

A big concern when becoming a freelancer in Germany is to be able to understand the system & pick the right health insurance. You probably know that you can either go with private or public companies. If you need to refresh your knowledge on the matter, have a look at this post on this blog that explains how it all works. In a nutshell though;

  • Going with public companies (Gesetzlichen Krankenkasse) means that yours fees for health insurance will be based on your income at around 15% of what you earn, with a legal minimum monthly fee of about 350€. This option is more costly, especially in the beginning when you don’t earn anything, but it does cover kids and spouse with you.
  • Going with a private scheme (Private Krankenversicherung) means that the rate is based on your health profile and risks. Consequently, if you are young and fit in your twenties, you might have plans as cheap as 150€ per month. However, as years go by and your health is more fragile, it can quickly increase to 500€ or even more if you are in your fifties. Kids and spouse are not covered. Pick your provider carefully since they each have unique plans and different coverage at different prices. The offer is way more diverse than in the public system. It is recommended to meet a broker or use comparison platforms such as Tarifcheck or Preisvergleich.de to find the best fit and the best price.

Good to know

Artists & performers can have half of their fees covered by the KSK (Künstlersozialkasse) when they stay in the public scheme.

People currently out of a job and registered at the Arbeitsagentur can apply for a Gründerzuschuss. It is a little grant which helps you pay your health insurance in the early days of your self-employment in Germany.

 

Taxes as a freelancer in Germany

Everything around taxes

Let me first introduce the main actors involved in this story:

Umsatzsteuer or Mehrwertsteuer (V.A.T)

As pretty much anywhere, a value-added tax paid by businesses (19% or 7% in Germany). Here, you can deduct the amount of V.A.T you paid on good or services you bought from the amount of V.A.T you added to your own bills. If you paid more than you received, the Finanzamt will refund the difference. This is paid monthly to the Finanzamt during the first 2 years and quarterly after this if you don’t collect so much V.A.T through your activity.

Freelancers and other self-employed people earning less than 17.500€ per year can choose to avoid this scheme altogether by adopting the “Kleinunternehmerregelung” (Small business rule). This means that there is no V.A.T on your bills, but you can’t deduct V.A.T on things you bought either. This rule makes sense for smaller operations with little investment: less strain on the cash flow. Above this limit, it’s compulsory to bill V.A.T as well. You also need to register for an EU V.A.T ID if you plan to do business with clients outside of Germany.

Einkommensteuer (Income tax)

For freelancers and self-employed people, the income tax will apply to everything you earn with your small business. In Germany, there is a threshold under which the income is always tax free. In 2016, this amount was 8 652€ per year, i.e; any euro above this is taxed.  The tax is due every year to the Finanzamt and should be declared before the 31st May of the following year. It is a part of your Steuererklärung. For high-earners, the Finanzamt might decide to set quarterly installments instead, based on previous statements. This means that instead of paying the whole amount at once every year, you need to transfer a part of it every quarter. This has the advantage to be safer/smoother on your cash flow.

Gewerbesteuer (Trade tax)

This trade tax only applies to Gewerbetreibende. It’s an additional tax that applies on your overall turnover for the year. You are not required to pay if your turnover is below 24 500€ per year. It is due yearly to the Finanzamt and should also be part of your Steuererklärung, sent in before the 31st May of the following year. For high-earners, you can also expect quarterly installments too.

So to sum it up:

Tax typeWho pays it?When?How?
UmsatzsteuerFreelancer – Gewerbetreibende (except if Kleinunternehmer rule applies)Monthly until the 10th of next month, then every quarter if you don’t collect a lot of V.A.T.Fill in form: “Ust-VA”

(Umsatzsteuer Voranmeldung)

EinkommensteuerFreelancer – GewerbetreibendeEvery year until 31st May (for the year prior). High-earners can have quarterly installments instead.With your Steuererklärung

Fill in form: “Est 1 A”

GewerbesteuerGewerbetreibendeEvery year until 31st May (for the year prior). High-earners can have quarterly installments instead.With your Steuererklärung

Fill in form

“GewSt”

How do i communicate with the Finanzamt?

It is highly required to use the government’s issued ELSTER tool to communicate with the Finanzamt. This software has all the forms required to be able to declare what’s relevant and do your tax return.

What does the process for the yearly tax return (Steuererklärung) look like?

I have made detailed guide about this topic this way. It has a lot more details and i will avoid making this post longer than it already is.

Which expenses can I put off in taxes?

Being successful as a freelancer in Germany is just as much about increasing your income as it is about decreasing your taxable income. There are a certain number of expenses that can be accounted for to reduce your total taxable income. This is why you need to make sure to keep during 7 years all bills related to:

  • Stationery
  • Office space and equipment, also if working from home.
  • Work-related trips
  • The services of an accountant
  • Half of your phone bills
  • Cost of childcare
  • Business lunch or dinner
  • Health, pension and other insurance contributions.

You can find a more detailed list this way. How to properly account them for, i will cover them in the part about book keeping later on in this article.

 

Banking for freelancers in Germany

About banking

Do i need a special business bank account?

Becoming a freelancer in Germany (or simply self-employed for that matter) comes with simplified management, and that’s true for your bank account too.  You can simply use your personal bank account if you already have one to support all your expenses and incoming payments for your operation. This comes with the risk of using your personal funds to support your professional life though. Make sure to separate both to avoid cash flow issues, especially if you decide to pay V.A.T as well.

You can of course decide to open a second bank account dedicated to your professional life. If you need help on how to open a bank account in Germany, i have already made a dedicated guide this way.

 

 

Bookkeeping self employment in Germany

Around invoices, bookkeeping & billing

Doing invoices right

Now that you are a proper business, make sure that your bills are also as professional as your business cards. They need to include all the following items to be valid:

  1. Your full name and address
  2. Full name and adress of your customer
  3. Location, date and unique ID of invoice
  4. Your tax number (Steuernummer)
  5. Description of goods/services, time of delivery & when payment is due
  6. Net price & discounts if applicable
  7. Added tax if applicable (If not; mention the Kleinunternehmer rule § 19 UStG Paragraph 1)
  8. Total price

You can find a pretty nice excel template on this website. You can then edit them to fit your situation and your looks.

Keeping your books clean

I don’t need to tell you that one of the challenges becoming a freelancer in Germany is to be able to keep an eye on your finances, your ingoing and outgoing bills. A lot of self-employed people in Germany have failed their projects or lost a lot of money because of bad accounting. I know i know; it is sometimes frustrating to be almost spending more time being an accountant than doing your actual job. Why is this important:

Rigorous accounting has 3 long-term advantages

  1. At some point or other, you will get audited by the Finanzamt. This means they can ask questions on anything. Keeping the records straight will avoid headaches and conflicts, especially if it’s about 5 year old items.
  2. Every year until the 31st May, you will need to do your tax return (Steuererklärung) and communicates how much in total you earned during last year, this can be done in minutes if things are kept clean, not hours.
  3. You can account for all small expenses you had during the year, which will add up to a lot to reduce your taxable income for your tax return to. This requires properly recording and filing each bill you received, physical or not.

For this, a simple excel sheet will do if you have patience and you are rigorous. This page has a pretty neat Excel template (especially for Gewerbetreibende). This involves a manual entry for each item in a table divided by month. It’s also hard to keep a copy of each bill when you have expenses.

However it doesn’t have to be that way. Nowadays, there are free or reasonably priced apps that allow to keep control of all movements during the year and facilitate the work of a Steuerberater if you have one. This is a little selection of bookkeeping software for freelancers in Germany:

  • Lexware: Consistently awarded by “Praxis Tests”, trusted by Steuerberatern and used by thousands of small business owners and freelancers. It is a reference in Germany and covers all of your accounting, invoicing and tax returning. (From 10€ per month – Interface in German only).
  • Debitoor: Also, a trusted name in the German market and internationally and my personal favorite. Debitoor offers the same broad array of services as Lexware but it seems to be a bit more open to a new economy use by integrating third party partners or API to make it easy to accept payments through PayPal, use Izettle or connect your online shop. (From 12€ per month – Interface in English, German or 7 other languages – Free test)
  • FastBill: A great contender on this list, FastBill is great at keeping an overview of the current affairs in a slick interface. You can also use different ways to receive your money and manages international business too.  (From 9€ per month – Interface in English – Free trial month)
  • Reviso: Formely know as e-economic, it’s also making a name for itself with its KPMG-certified software. Unlike its competitors, the different prices and plans don’t limit features but simply the amount of entries. (From 10€ per month – Interface in English & 6 other languages – Free trial month).
  • Zervant: A simple to use tool to manage your invoicing. It only does that but it does this well and most of all: it’s for free.

Remember if you pick one of the paid options: this would count as an expense you can put it off in taxes too! It’s money well invested.

Using a Steuerberater

You may have worked with a Steuerberater before to optimize your tax return as an employee, but if you become a freelancer in Germany, they can do much more than this. Although the name “Tax advisor” only suggests proficiency in tax related issues, they can help freelancers for the following issues:

  • Bookkeeping & Accounting
  • Professional law
  • Help with with V.A.T, Income & Tade Tax (calculating and filing when it’s due.)
  • Help with the annual tax return (+ EÜR & Gewerbe tax for Gewerbetreibende)
  • Representative duty (communicating with the Finanzamt in your stead.)
  • General legal counselling

Using a Steuerberater can appear costly but it’s often worth it when you are starting to earn well. The bet is that the benefits/return will off-set the expenses. Their fees are usually paid monthly if they are involved with the daily accounting business and/or yearly, if you only need help for the tax return until the 31st of May.

The costs of hiring Steuerberater is often well worth-it as it will optimize your expenses & maximize your tax return.

You can often greatly reduce their monthly fee by using one of the bookkeeping programs mentioned above. This is because it’s much less work for the Steuerberater to collect and process information through an export function than to process an excel sheet. Those software usually have a special access for Steuerberater made especially for that.

If you don’t know where to start to look for one, you can use platforms like Ageras which connects freelancers to English-speaking Steuerberater all across Germany for free. More info on how to find an English-speaking Steuerberater in Berlin here.

Resources for self-employment

Other resources to consider when becoming a freelancer in Germany

  • Make it in Germany: A government-owned website for skilled-workers wanting to move to Germany. It has information on setting up your own business.
  • Existenzgründer: Another great government-owned website that gives a lot of details on how to become a freelancer in Germany. It works for each profile of self-employment. It’s available in other languages but it is most complete in its Germany version.

Good luck!

Ps: please note that despite all my best intentions, some of this information can be inaccurate or missing details. I urge you to talk to a professional coach, especially if you are preparing your freelance visa from abroad. Let me know in the comments if you spot something unclear that needs improvement or if i should cover something more.

Sources: 1, 2

75 Comments

  • Reply Loic Graindorge 06/09/2018 at 15:34

    Hello, thanks for the post. Is it possible to combine a full time job and a freelance activity? Does it change the process to register the freelance business? Thank you

    • Reply Bastien - Settle in Berlin 06/09/2018 at 15:51

      Hey Loic. Yes, it’s possible to combine, it doesn’t change the registration process.

  • Reply Lucila Vieira 27/08/2018 at 22:44

    Hi! These material is really helpful. Thank you very much for posting all these information.
    I’m an EU citizen and I’ve arrived recently in Berlin.
    I’ve already found a part-time job (with a formal contract) and also I have the oportunity to work as a free lancer ( that means to issue invoices for my services). I want to conciliate the both ativities. I’m wondering how would I manage the of tax payment criteria and self employer registration. How does it work in this case?
    Thank you for your help.

    • Reply Bastien - Settle in Berlin 30/08/2018 at 10:21

      Hi Lucila. you can have both a part-time employment and a freelancer activity at the same time. Income tax will be taken automatically from your payslip for your part-time job and for the freelance stuff, it will work as indicated in this post.

  • Reply Zbig 06/08/2018 at 23:53

    This is gold! Thank you!

    I have a small question though.
    I have a possibility to do some freelance as an artist for 2months. Already exceeded 17500Eur earnings with a full time employment contract for the first half of 2018.
    1) If I would make those 2 month freelance (no other employment parallel). Do I need VAT registration at this point, and sending monthly declarations to Finanzamt??
    After those 2 months I will go on full time employment again , so it is rather a one time parachute jump:)
    Regards,
    Zbig
    2)If then I jump back on full time contract

    • Reply Bastien - Settle in Berlin 08/08/2018 at 16:30

      Hi Zbig. If i’m correct, you won’t be crossing the 17500€ threshold with your 2 months freelancing, so you can use the Kleinunternehmer regelung. Your income as an employee doesn’t count.

  • Reply Maja 01/08/2018 at 21:00

    Thank you for the superb post! This might be a very silly question but is it OK to have a regular job, a mini-job, and work as a freelancer when the freelance income doesn’t exceed the taxable €8,820? It makes me wonder since it’s not allowed to have two mini-jobs…!

    • Reply Bastien - Settle in Berlin 06/08/2018 at 22:17

      Hi Maja. Honestly, i have no idea, even after a bit of researching just now. Sorry and good luck !

  • Reply Agnieszka Konopka 09/07/2018 at 15:16

    Dear Bastien, if you could answer me I will appreciate it!
    I have a full-time job, but I also earned some money on the side (around 1.000e between March-June).
    My friend’s tax advisor told me that if I will keep it under 2,400e I don’t have to pay taxes on that extra income, so I just created a simple invoice billed to USA address. But is this amount also including my monthly salary from a day job?
    However – lately I’m thinking about starting my own site where I will provide opportunities for collaborations (artist management). I will receive 20% of the amount that an artist will earn based on the gigs I provide or art sell. Can I register as freelance or this has to be as a business then???
    I would also like to sell their artwork through page but if that would stand on the ‘freelance’ way to register then i would skip it.
    And how I can deal with those invoices that I’ve created without registration?
    Thanks for the help!

    • Reply Bastien - Settle in Berlin 12/07/2018 at 11:29

      Hi Agniezska. You’d need to register as a business then. As for the rest, better to trust your tax advisor on these matters.

  • Reply Ayrene 06/06/2018 at 10:21

    Hey thank you for such a great post it’s very helpful.
    Ok so I’m working a part time retail job and I am planning on starting a one man little clothing brand. Meaning I will design and make all pieces myself and sale them online and to retailers. So do I register it as a company (, self employment) since I’m working from my house can I claim part of the rent and bills ie Gas and electricity back from my taxes also I

    • Reply Bastien - Settle in Berlin 22/06/2018 at 00:59

      Hi Ayrene. Yes, this would be a Gewerbe. Yes, you can claim part of your rent as expenses, although you’d need to have a dedicated room as your workshop/office to make it work officially, in case the Finanzamt checks.

  • Reply Luke 25/05/2018 at 17:01

    Thanks for the good info. I have qualified for a visa in Germany because I got a contract with a company as a massage therapist but I would also like to start an online business selling artwork… prints,originals online. Would that be qualified as freelance or would it have to be a Gewerbetreibende ? If I had to maybe I could just register the business in the US and do it from here…. Thanks so much for your time!
    Sincerely,
    Luke

    • Reply Bastien - Settle in Berlin 29/05/2018 at 22:22

      Hi Luke. This would be Gewerbe.

  • Reply Emma 15/05/2018 at 11:25

    Hi Bastien,
    I’m in the process of putting the freelance forms together for the visa. The question I have is do all materials provided need to be translated into German? I’m seeing this is needed for the Letters of Intent and Reference, but not specifically stated for the CV, Cover Letter, Finance Plans etc.
    Thank you!
    Emma

    • Reply Bastien - Settle in Berlin 15/05/2018 at 21:49

      Hi Emma. This is probably the safest way to go.

      • Reply Emma 16/05/2018 at 09:12

        Thank you!!

    • Reply yanneth 26/05/2018 at 08:56

      hello Emma,

      i did all this.

      All in German. English will not be adviced as these paper will go to Immigraton office. Is different if you talk to a client which will not matter your English.

      I am spanish speaker and got to translate with an official translator all documents. got to notazide and make apositlle as well to make it valid abroad your country.

  • Reply Pankaj 17/04/2018 at 22:39

    Hello Bastien,
    I am in desperate need of help, i have tried speaking to tax advisers but they keep telling me different things. I have posted messages on facebook also but everyone keeps telling me different things.
    I am getting a good opportunity to work in IT for a company in Germany.
    I have spoken with a specialist German tax adviser in the UK. He advised me that i will not be considered as a freelancer by German authorities unless i am working for more than 1 client in Germany, he also said that both the client has to be a German registered company.
    I understand that i can save paying social security if i am a freelancer.

    Do i have to pay VAT on my income?
    Cani claim back living expenses?
    Can i claim back food expenses?
    Can i claim back air travel to UK, my family is going to stay in UK?
    Can i claim back for local travel to work?
    Do i have to pay social security?
    I understand that i have to pay for medical insurance
    Do i have to pay solidarity charge?
    Do i have to pay corporation tax?
    Do i have to purchase indemnity insurance ?
    Do i have to pay church tax ?
    Do i have to pay additional charges on money transfer from EUR to GBP, what difficulties i may face ?
    Are there any additional/other charges i must be aware of?

    Regards
    Pankaj

    • Reply Bastien - Settle in Berlin 23/04/2018 at 11:28

      Hi Pankaj. I cannot replace the advice of a professional consultant, i’m afraid. It’s best your take your questions to someone qualified to answer them.

  • Reply Ciarra 16/03/2018 at 23:39

    Hello,

    I recently received an artist visa in Berlin for two years. I am looking to work for a cleaning service part time as supplemental income on a “freelance” basis. I know some other people on artists visas who do this but I am worried about doing a “freelance” job that is not a part of my visa description. How risky is this if I am making sure to keep everything documented, paying taxes, etc. if I am audited in the future or when reapplying for my visa. Thank you

    • Reply Bastien - Settle in Berlin 17/03/2018 at 10:53

      Hey Ciarra. Unfortunately, visa issues is not a field where i am knowledgeable, sorry. I don’t want to lead you into a bad situation. Good luck.

  • Reply Stuart 16/03/2018 at 15:04

    Hi Bastien, great post!
    I have a bit of a specific question:
    Do you happen to know if you can be a freelancer in Germany, if you live in Germany, but also have a full time job in another eu country?
    I am asking since I got a new job in a couple of months, but need to bridge a period, and will only to move to the country with the job in the summer.

    (will travel back and forth in the meantime, so kids can finish school in germany)

    • Reply Bastien - Settle in Berlin 17/03/2018 at 10:51

      Hi Stuart. There is nothing against this i suppose but make sure that everything in order regarding taxes and contributions.

  • Reply chan 11/03/2018 at 22:02

    Hi Bastien,
    Many thanks for your detailed introduction about how to be a freelancer. I am studying a Master programme in Germany. I would like to try to stay in Germany and to look for a job. I would like to ask:
    1. Can I apply for a freelancer visa after studying, if I don’t have any freelance jobs in the beginning? if yes, how long can I stay in Germany?
    2. If no, what ways can I try to stay in Germany to look for a job? Is there a minimum salary per month that I should fulfil?
    many thanks again!
    chan

  • Reply Ujjwala 18/02/2018 at 20:54

    Thank you for such clear post! I am Indian and here with my husband who is on work permit in Germany. I am getting freelance opportunity to work as a online content writer for firm in India. I have couple of questions: 1. Is it mandatory to add VAT to the invoice if i am billing to company outside Germany (in this case: to Indian company) or is VAT exempted if goods/ services are exported outside Germany 2. Currently i am covered by my husband public health insurance. At what income level do i need to have my own health insurance. thank you!

    • Reply Bastien - Settle in Berlin 19/02/2018 at 18:09

      Hi Ujjwala. VAT is not due to services and goods delivered outside of Germany, unless you do a lot of business and earn more than a certain threshold in that country, then you might need to apply for a local tax number (in France, that would 100,000€ for example if i’m correct). Health insurance is mandatory, regardless of the income level.

      • Reply Barry 26/03/2018 at 13:09

        Hallo Bastien. I will be contracting for 6 months from Germany for a company in the UK and I will earn around 27,000 Euros. Do I need to add VAT to the invoice?

        • Reply Bastien - Settle in Berlin 28/03/2018 at 19:26

          Hi Barry. There are exceptions to this depending on your trade but that’s the rule to not bill VAT yes.

  • Reply Mel 13/02/2018 at 12:48

    Hi, Thanks so much for this useful and informative post.

    I have a few questions if you can help me out…
    -Can you claim 100% of health insurance costs on the tax return? 350 per month sounds like a hell of a lot to pay as a freelancer, but if it is deducted off the tax you would pay then I guess it’s not so bad!
    -If you have a part time job that pays your health insurance then how does it work on the extra income you get as a freelancer?
    -Can you claim for space in your house that is purely used for work, i.e an office.
    -As an artist that offers creative services and consultancy, but also has a small online shop that sells mass produced items, do you need to register as Gewerbe and freiberufler?

    Many thanks 🙂

    • Reply Bastien - Settle in Berlin 14/02/2018 at 22:02

      Hi Mel. Health insurance will be accounted for as expenses when doing your tax declaration for the year. When you have part-time and a freelancer gig on the side at the same time, it’s the occupation that earns the most that pays for the health insurance (ie: if you earn more with your job, that’s what pays your health insurance). Yes, you can claim a room to be used for work. If you have a shop, yes you need a Gewerbe, refer to the article again.

  • Reply Lily-Anne Markham 30/01/2018 at 14:57

    Hello, as a freelance artist and illustrator are we allowed to put artis materials and supplies as expenses? Such as paint and paper and pens etc?

    • Reply Bastien - Settle in Berlin 01/02/2018 at 19:30

      Hi Lily: yes.

  • Reply Amyl 16/01/2018 at 21:11

    Hi Bastien. Thanks for your insightful post. I’m considering to follow a career path as a freelancer in Germany. I live here since +-3 years, married and about to graduate as a MSc of Management and I’ve already worked 1 year in Germany. It means also that, as a foreigner, I hold a valid work visa, I’m health insured and etc. Is there any particular difference between a freelancer and a consultant in Germany? Sorry to ask but it really confuses me.

    • Reply Bastien - Settle in Berlin 18/01/2018 at 19:42

      Hi Amyl. As far as the authorities are concerned, they don’t care if you are consultant. you just have to make sure that if the field you want to work in requires you to have a Gewerbe or be Freiberuflich (see definitions in the post).

  • Reply Iosu Palacios Asenjo 16/01/2018 at 12:35

    Hey, thanks for all this wonderful info, it has helped me a lot to reduce the anxiety of becoming self employed. I’m leaving my Job in an art studio in order to become freelancer and due to the current state of the market (I have spent 5 years in this studio) I’m going to need some time for catching up and work on a competitive art and client portfolio. In Spain, where I’m from, there is the case where you can capitalize your unemployment money in to your business, my question therefore is whether is there something similar in Germany where I could use that money to grant me the much needed buffer time. Thanks in advance!

    • Reply Bastien - Settle in Berlin 16/01/2018 at 14:26

      Hi Iosu. In Germany, the “Gründerzuschuss” is probably what you are after.

  • Reply Alina 15/01/2018 at 21:52

    Hello Bastien
    Thank you for this grate and useful blog.
    I have signed up as a freelancer and declare that my income will be less than 17.500 Euro per year. I got my tax number and started with giving invoices with the sentence that I’m not charging/paying VAT.
    Now i got a letter informing me with a VAT number. Is that means I do have to pay VAT? (although my incomes are low..)
    Should I ignore the number?…
    Thank you:)

    • Reply Bastien - Settle in Berlin 16/01/2018 at 14:38

      Hi Alina. You need to insert your VAT number or Steuernummer on your invoices, even though you are following the Kleinunternehmer rule. It doesn’t mean you are paying it.

  • Reply Maria 15/01/2018 at 15:18

    Thank you very much for the post! I understood that Freelancers cannot sign directly contracts with companies, they need to use a consultancy company as intermediate and this is requested by German law. Is this accurate?

    • Reply Bastien - Settle in Berlin 16/01/2018 at 14:21

      Hi Maria. I don’t know where you got this from but this is first i hear of it and believe it to be innacurate. Is there a special rule for the industry you are working in?

  • Reply Roxana 11/01/2018 at 19:16

    Thank you! Plenty of gratitude sent to you for taking the time to write this post.

  • Reply Vanessa 07/01/2018 at 23:39

    Hi Bastien! Thank you for sharing these super useful informations and helping the freelance community 🙂 I am moving to Berlin from the UK (where I am the director of a LTD company) in 10 days but I will keep my business open in London until April. How long does it roughly takes to register as a freelancer in Berlin? I want to be ready to start working right after I close my UK company and want to start the german paperwork as soon as possible. Thanks 🙂

    • Reply Bastien - Settle in Berlin 09/01/2018 at 11:21

      Hi Vanessa. Since you are (still :S) an EU citizen, you only need to complete the prerequisites mentioned in the post before you can register as a freelancer. One of them if to have registered address in Germany, which requires to find a place. That alone may take a while. It’s hard to reply to your question then. The registration itself is a matter of days until you receive your new tax ID number.

  • Reply Meaghan 21/12/2017 at 00:04

    Hi Bastien,

    I am a freelancer, will be providing business consulting services to clients in the UK, EU and Germany. What is the best way to approach the VAT situation? Also, I am a consultant in digital banking services and as such, I have opened up three business bank accounts, but will only be using one for my banking. Is it okay to just submit these bank details with the annual tax return or do all bank accounts need to be submitted?

    Thanks!

    • Reply Bastien - Settle in Berlin 28/12/2017 at 17:16

      Hi Meaghan. I don’t know what you mean by VAT situation. You won’t bill VAT to EU clients when doing businesses with them due to the EU rules and you will bill VAT to German clients. Concerning banking; yes it’s fine.

  • Reply Guy 20/12/2017 at 14:31

    Hi Bastien,
    Thanks for the very informative guide!

    I wanted to kindly ask – what would you recommend for me in case I am already fully employed and I want to make some very small cautious steps into the freelancing world during my after-hours or weekends, at the moment without really quitting my job?
    Do I need additional health insurance besides my public one from my day job?
    How do I avoid paying for a tax consultant (I don’t trust my German enough to tackle a tax declaration on my own) assuming I’m not expecting a big income for 2018?

    • Reply Bastien - Settle in Berlin 28/12/2017 at 17:19

      Hi Guy. You can use the platforms recommended on this post to do a tax declaration on your own and in English. You can have a Nebenbeschäftigung (side gig) with health insurance from your day job. However, if you make more money with this than with your job, you will have to take your own health insurance.

  • Reply Suppada 02/12/2017 at 12:15

    working as freelance IT consultant since August 2017. I opted for self billing invoice i.e invoices are generated by my company.

    For August work, invoice was generated in September and actual payment only in October.
    Similarly for September, October and November work invoice generated in December and actual payment will happen in January 2018.

    How to declare VAT and do VAT payments in these cases? I also have small expenses every months.
    Not sure whether VAT declaration has to be done on Cashflow basis only. i.e., even if there is no payment in August, should i still declare VAT for my expenses alone? Or should it be done on Sales basis i.e., for august should i declare both VAT from sales and expenses even though it was actually paid in October?

    Thanks for your help.

    • Reply Bastien - Settle in Berlin 05/12/2017 at 20:36

      Hi Suppada. There are different rules that can apply: either you declare the VAT for when you received or payed the money, or when the ingoing or outgoing bills were generated.

  • Reply Marie 23/10/2017 at 09:25

    Hi Bastien. Between the Umsatzsteuer and the Einkommensteuer, which one of these tax number I should indicate while preparing an invoice for a client? The invoice is without VAT as I’m a kleinunternehmer

  • Reply Cyril 04/10/2017 at 10:52

    Hi Bastien,
    Thank you for information.
    I want to become a freelancer in Germany.
    I just wondering, for IT specialists, need i have university diploma in IT to open “freiberufliche” ? Or higher education diploma is not necessary in my case.

    Thank you.

    • Reply Bastien - Settle in Berlin 04/10/2017 at 16:39

      Hi Cyril, IT roles are not protected by any specific diplomas, you can start as a freelancer without an Abitur if you wanted. 🙂

  • Reply Lewis 31/08/2017 at 14:14

    Hey! Thanks for the info, super helpful.
    I’m tossing up whether I go for the freelance visa or the employee visa as I am working both for a company and as a freelancer. If I were to go for the employee visa, do you know if I would still be able to do freelance work?

    Cheers, Lewis.

    • Reply Bastien - Settle in Berlin 31/08/2017 at 17:24

      Hi Lewis. As an employee, you are also allowed to have a freelance side-gig (“Nebenbeschäftigung”), as long as you don’t work too many hours (but who’s there to check, hey?). I suppose it would be possible yes then, but maybe there are special conditions attached to the employee visa that could prevent that. Make sure to check that.

      • Reply Hayley 20/11/2017 at 12:11

        Hi Bastien, this page is so helpful, thank you! Could you explain a bit more about the “Nebenbeschäftigung”? I know that if you earn less than 400 euro per month it’s not taxed, but do you know if I still need to register a separate tax number for the Nebenbeschäftigung? And do I need to declare the income at the end of the year even if it is less than 400 euro? Thank you, am finding it hard to find straightforward information about this!

        • Reply Bastien - Settle in Berlin 23/11/2017 at 19:01

          Hi Hayley. No you don’t need a separate tax number. Yes you need to declare it.

  • Reply Tegan 26/08/2017 at 11:31

    Hi Bastien,

    I was wondering if you’re allowed to start work straight away after filing the freelancer registration with the Finanzamt or do you need to wait until you have received your new tax number in the mail.

    I have a contract to start work soon but have not received my new tax number yet, but I figured this would not be a problem as I don’t plan to invoice until the end of September.

    What’s your opinion on this?

    • Reply Bastien - Settle in Berlin 27/08/2017 at 13:26

      Hi Tegan. In my opinion, you can probably start to work before but the billing can only start after you are properly registered and everything.

  • Reply Eleodora 17/08/2017 at 09:30

    Hello Bastien! Thank you so much for such important information!
    I have a question about the monthly basis steuer payment… I registered my Gewerbe-Anmeldung and now is the next step fill the steuer formular?
    I will work in a third part contract with Hays for another company, and when I called the Finanzamt they said me to do the Gewerbe registration and all after this would happens “automatically” (because I already have a normal steuer number)… So I am a bit lost because I never worked as a Free lancer before and your very helpful page said I must to register myself in the Finanzamt and pay the monthly… Can you help with this doubt? Should I begin to pay them before have my first contract? And how itt works in this case? Thank you so much!

    • Reply Bastien - Settle in Berlin 17/08/2017 at 10:25

      Hi Eleodora. Be sure to differentiate the different types of taxes and their installments. we are talking here about VAT, which you must transfer monthly to the Finanzamt in the early days, if you decide to not take the Kleinunternehmer rule. You collect VAT through your bills so you only transfer to the Finanzamt afterwards.

  • Reply Tomas 22/07/2017 at 07:25

    Hello,

    Thank you for your post, it is very helpful.

    I have a question. I am a Civil Engineer with a residence and a working permit here in Germany (come from a non EU land). I have a full time job as Engineer in here in Germany. Is it possible for me still to work as a Freelancer (additional 40-50 hours monthly)?

    • Reply Bastien - Settle in Berlin 22/07/2017 at 23:53

      Hi Tomas. It is possible to be a freelancer as a Nebenjob as long as you don’t work too many hours (in theory, no more than 2 extra hours per day. Source.). However, since you are on a working permit, you need to make sure your full-time job contract allows this as it might be reason for termination. In general, your employer should be aware of and authorize any side project you are working on.

  • Reply Sebastian 18/07/2017 at 10:02

    Hello!

    I got a contract to work as programmer for a startup, only 20 hours a week. The thing is that i dont have a degree in computer sciences (Im studying the degree online and ill get my diploma in 2 years). I have lot of experience and the german company really wants to hire me! Do you think that imma have a problem in the application? any suggestion

    • Reply Bastien - Settle in Berlin 19/07/2017 at 11:00

      Hi Sebastian. I’m not sure i get your concern. You already have a contract offer from that company. Should that not reassure you on your chances?

      • Reply Harry 06/09/2017 at 16:19

        I think what Sebastian means is, he’s found freelance work as a programmer but is worried he will not be able to register as a freelance programmer without a degree. I’m in the same situation – do you know if freelance programmers need a degree or are they one of the professions that is exempt from this requirement?

        • Reply Bastien - Settle in Berlin 07/09/2017 at 10:58

          Hi Harry. I’m not an expert in visa issues but to my knowledge, programming is not “protected” by a state recognized diploma, like being a lawyer or accountant for example so i don’t think it’s a problem as long as you show you have enough business in Germany.

  • Reply Khaled 05/07/2017 at 19:33

    Thank you very much for a wonderful post. I have resident permit in Germany and doing full time job but I am not allowed to work as freelancer. I am married. My wife has work permit in Germany too and allowed for freelancing. She has an Youtube account and earning a good amount. So, she want to withdraw that money and declare her income. How it will be complected for us? She also doing a mini-job. How the income tax will calculate for us? Thank you.

    • Reply Bastien - Settle in Berlin 05/07/2017 at 21:18

      Hi Khaled. I’m glad you liked the post. Have you seen this post on the matter of income tax?

      • Reply Khaled 05/07/2017 at 22:54

        Thank you for your reply. I have seen the post and its helpful as well for me. We may be belongs to the second category. If you have no problem, could you please suggest any tax consultant office or lawyer based in Hannover that would be helpful? Thank you very much again. Its really a very helpful blog.

        • Reply Bastien - Settle in Berlin 06/07/2017 at 10:16

          I’m afraid i can’t help you there and recommend someone in that area. Google is still your friend there. good luck.

  • Reply Brenda 01/05/2017 at 15:54

    Thank you for such a helpful post! Everything here is very clear. My question (if you’d be so kind): if as a freelancer you’ve earned only a small amount (e.g. a hundred euros) do you have to file einkommensteuer? Or file any tax paperwork at all? In my case I registered as a freelancer, completed a very small freelance job, and that was it. Thank you very much!

  • Reply Shahid 19/04/2017 at 10:00

    I am Mechanical Engineer and have residence permit of Germany. I want to become a freelancer.
    Please give the procedure to become freelancer and your consultancy in this regards.

    • Reply Bastien - Settle in Berlin 19/04/2017 at 12:22

      Hi Shahid. If you already have a residence permit for Germany, it shouldn’t be a problem for you. All the steps are listed here on this page for you to follow.

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