Understanding letters you receive from the Finanzamt | for freelancers in Germany

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Some days after registering as a freelancer in Germany, you will receive important letters from the Finanzamt. Those love letters from the German tax authorities are very important.

They look complicated and filled with Amt-German but this guide will do its best to decipher them for you.

Feel free to ask questions in the comments section too. I answer each question personally.

Overview

Here is a table summarizing the possible letters a freelancer can receive from the German tax authorities:

Letter itemPurposeWhat to do about itDetails
Tax number assignment (Steuernummer)Assigns a tax number for freelancing activities.Use this number on invoices and for tax declarations.Jump to details here.
VAT identification number
(USt ID Nummer)		Necessary for freelancers who need to charge and remit VAT.Use this number for VAT transactions and filings.Jump to details here.
Income tax prepayment schedule (Vorauszahlungsbescheid)Outlines the schedule for income tax prepayments to ensure regular tax payments.Make prepayments as scheduled to avoid a large tax bill at the end of the year.Jump to details here.
VAT prepayment scheduleDetails the schedule for VAT prepayments.Declare & pay VAT as per the schedule (usually quaterly or monthly).Jump to details here.
Istversteuerung notificationInforms that VAT is due when payment is received from clients.Follow the Istversteuerung method for VAT payments.Jump to details here.
Tax assessment report (Steuerbescheid)Provides details about your tax assessment, including any refunds or additional taxes due.Review the assessment and pay any additional taxes or claim refunds as applicable.Jump to details here.
Tax number for married freelancersProvides separate tax numbers for married freelancers for different tax reports.Use the appropriate tax number for EÜR (Einnahmenüberschussrechnung) and VAT filings.

The tax number letter – Steuernummer

A few weeks after registering as a self-employed person or freelancer, you should receive a letter with your Steuernummer (tax number). This letter is good news; it means you can start including your tax number on your invoices and charging clients. But like any letter from the German government, understanding and deciphering the wall of text and numbers can be difficult. So let’s start at the top.

Your new tax number

The first and most important part of the letter is at the top: your new steuernummer. It will have the following format: XX/XXX/XXXXX.

Tax obligations

The next section details your tax obligations as a self-employed person. Your exact obligations vary depending on your specific situation, but you will probably be required to submit one or all of the following:

  • Einkommensteuer – your general income tax return once a year
  • Umsatzsteuer – your VAT either monthly, quarterly or yearly
  • Gewinnermittlung nach § 4 Abs. 3 EStG – your profit and loss statement (EÜR) which is submitted together with your income tax

Your job title

The following information contains the official job title that you wrote down when you registered with the Finanzamt:

Steueridentifikationsnummer

The next part of the letter states your Steueridentifikationsnummer (tax ID number). This is your personal tax identification number and is used whenever you contact the Finanzamt so that they can quickly and correctly identify you. This number is assigned to you when you register your first address in Germany and doesn’t ever change.

When to submit your VAT declarations

The following section lets you know exactly when and how often you should submit your VAT declaration. The period will either be quarterly or monthly, but it’s important that you know which so you don’t miss a VAT payment and receive a fine from the Finanzamt. This is super easy to keep track off when using an accounting software.

If you registered as Kleinunternehmer, then this information will not appear in this letter; you will only need to submit your VAT yearly alongside your income tax.

Paying the Finanzamt

The final paragraph of this letter lets you know the different ways in which you can pay your taxes (most commonly via an IBAN bank transfer). Every time you pay or make a transfer, be sure to state your Steuernummer, the type of taxes you’re paying for as well as the applicable time period. If you want to automate the process, you can also agree to the SEPA Lastschriftverfahren (direct debit payment), but you’ll have to fill out an extra form on your Finanzamt’s website.

Income tax prepayment letter – Vorauszahlungsbescheid

The next letter you should receive from the Finanzamt is the Vorauszahlungsbescheid or prepayment letter. While the tables and numbers might seem scary at first, this letter is nothing more than a schedule of when the Finanzamt expects you to make your income tax prepayments. 

The state does this to ensure that all freelancers and self-employed individuals pay their tax regularly and on time, but also so that they aren’t burdened with one massive payment at the end of the year. 

The Finanzamt determines the amount that you have to pay based on your expected annual income (this amount can vary from year to year) and will be due either monthly or quarterly.

Required prepayments

At the top of the page, you will see precisely which prepayments for which taxes are required:

When are the prepayments due and how big are they?

The next section of the letter contains a table detailing exactly how much your prepayments are and when they are due.

  • The left column of the table states the type of taxes that are due (Einkommensteuer, Solidaritätszuschlag, and Kirchensteuer).
  • The deadlines for prepayments are in the top row of the table (e.g. 12 Märs, 12 Juni, 12 September, 12 Dezember).
  • The amounts that you have to pay are shown in the cells below the deadlines and to the right of the tax category.

The bottom section of the letter – Berechnung der Bemessungsgrundlage – details the amount that the prepayments are based on. This amount is based on the income you earned in the previous year, or on the estimate of yearly income that you provided to the Finanzamt when you registered as a self-employed individual. 

VAT related letters

The VAT ID number – USt ID Nummer letter

If you have chosen to bill VAT on your invoices, you will also receive this in paper format from the central Finanzamt this time. This letter is the most straightforward of all.

It contains your VAT ID in this format DE XXXXXXXXX (9 numbers).

The VAT taxation method letter – Ist/Soll-versteuerung

The final letter contains a few big words that might seem frightening at first glance, but with a little translation, we will shrink them down to a manageable terror. Basically, this letter is about the method you use to declare your VAT. It lets you know your tax state relating to your Istversteuerung (debit taxation) and Sollversteuerung (actual taxation). 

  • With Sollversteuerung, the VAT that needs to be submitted to the Finanzamt is due as soon as you issue an invoice.
  • With Istversteuerung, the VAT is only due when you receive money from your client or customer. Because of this, the Istversteuerung is preferred for freelancers, as you don’t need to fork out money to the state before you receive it.

The first paragraph of the Istversteuerung letter simply states that you are allowed to make use of the Istversteuerung. The next section details why you’re eligible for the Istversteuerung and why you don’t have to worry about the Sollversteuerung. The main reasons are because, as a freelancer, you make use of a profit and loss statement to declare your profit, and because you likely didn’t make more than 600.000€ in the previous year.

The final paragraph lets you know that should any of these rules no longer apply to you, then you can switch to Sollversteuerung in the following year without any notice.

End of “small business owner” notice letter

As you’ve learned in our guide about registering as a freelancer in Germany,, you can start with the “small business owner rules” (Kleinunternehmerregelung), which grants you simpler book-keeping rules. The main advantage is that you don’t have to bill & pay VAT forward, no VAT declaration. Pass the yearly 25 000€ income threshold, the Finanzamt lets you know that you are not a small business owner anymore.

This letter includes the date at which you should start declaring VAT (usually on a quarterly basis). It might also include the request of a one-off declaration, to cover for the time between the time you passed the threshold and the time you receive that letter.

Change in VAT declaration deadlines

After a certain threshold of VAT payed to the Finanzamt, they will let you know that you are to declare and pay VAT on a monthly basis & not on a quarterly basis anymore.

The letter includes the date at which:

  • You should do a last quarterly declaration
  • You should start to declare VAT monthly.

Tax assessment letter – Steuerbescheid

A tax assessment letter, also known as a Steuerbescheid in Germany, is an official document sent by the tax authorities (Finanzamt) to inform taxpayers about the outcome of their tax return. It details the calculation of their tax liability or refund based on the information provided in their tax declaration.

  • Freelancers in Germany are required to file an annual tax return (Einkommensteuererklärung) declaring their income, expenses, and other relevant financial information.
  • The Finanzamt processes the tax return to verify the declared income and expenses. They check for accuracy and compliance with tax laws.
  • After processing, the Finanzamt issues the tax assessment letter, which outlines the results of the assessment.

What to Do About It?

  1. Review: Carefully read through the tax assessment letter to understand the details of the calculation. Check for any discrepancies between your tax return and the assessment.
  2. Pay taxes due: If the letter indicates that you owe taxes, pay the amount due by the specified deadline to avoid penalties and interest.
  3. Claim refunds: If you are entitled to a refund, the amount will typically be transferred to your bank account automatically. Ensure your bank details are up-to-date with the Finanzamt.
  4. Appeal if necessary: If you disagree with the assessment, you have the right to appeal (Einspruch). The letter will provide instructions on how to file an appeal and the deadline for doing so.
  5. Adjust advance payments: The letter may also include information on adjustments to your advance tax payments (Vorauszahlungen) for the following year. Note these changes for future reference.
  6. Keep records: Keep a copy of the tax assessment letter for your records. It is an important document for future tax filings and potential audits.

Letters from other German administrations

Self-employed people registering a Gewerbe will also receive a letter from the Gewerbeamt. You can read more about what to do about it in this guide.

Feel free to ask questions in the comments if something is still unclear or if other letters should be included in this list.

Bastien

FAQ

What is the Finanzamt and why am I receiving letters from them?

The Finanzamt is the German tax office responsible for managing taxes, including income tax, VAT, and business registration for freelancers. You receive letters from them because you are registered as a self-employed person in Germany and are required to fulfill certain tax obligations.

How do I know if a letter from the Finanzamt is important or urgent?

Letters from the Finanzamt usually contain deadlines or specific requests. Look for phrases like “Frist” (deadline), “Zahlungserinnerung” (payment reminder), or “Anlage” (form). If you’re unsure, it’s best to get a translation or ask a tax advisor.

What is a Steuernummer and why is it mentioned in the letter?

Your Steuernummer is your unique tax number for filing returns and correspondence with the Finanzamt. It’s issued after you register as self-employed and is often included in their letters for reference.

I received an “Erinnerung” or “Aufforderung”. What does that mean?

An Erinnerung is a reminder-often about submitting tax documents or payments. An Aufforderung is a formal request or demand for action. In both cases, it’s important to act by the stated deadline to avoid penalties.

How can I respond to the Finanzamt if I need more time or have a question?

You can write a formal letter or email (in German) explaining your situation. If possible, get help from a German speaker or tax advisor to ensure clarity. Always include your Steuernummer and any relevant references.

What happens if I ignore a letter from the Finanzamt?

Ignoring a letter can lead to fines, late fees, or estimated tax assessments (Schätzung), which may not be in your favor. Always open and address letters promptly.

Are letters from the Finanzamt always sent by post?

Yes, most communication from the Finanzamt is still sent by traditional mail. In some cases, you can switch to electronic communication via ELSTER (the official digital tax platform), but paper letters are still common.

Sources & references

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