Registering self-employment: steps and sample letters

If you have had enough of being an employee and want to be your own boss, you must first register your self-employment before you can really get started. This involves some paperwork, but it’s not witchcraft either. How exactly the registration goes and what there is to consider.

Freelance or trade – the differences

In Germany, self-employment does not mean self-employment, because in this country, freelance activity must be separated from the trade. In the income tax law §18 EStG it is stated that to the freelance activity independently performed scientific, artistic, writing, teaching or educational activities include.

This includes the following Catalog professionsDoctors, lawyers, tax consultants, architects, engineers and interpreters. According to the law, there are other similar professions that fall within the scope of the liberal professions: Mountain guide, sculptor, designer, dietician, conductor, computer consultant, photographer, artist, lecturer, magician, marketing consultant, musician, interior designer, actor, writer, dance teacher, business consultant, make-up artist or copywriter.

To the person

Thomas Maas is head of freelancermap.de, an expert platform that places orders with self-employed people and freelancers. Previously worked at Immowelt in product management, among other things.

Who registers where and who is exempt from trade tax

Persons who wish to register a trade must do so at the relevant office. Freelancers, on the other hand, indicate their activity by sending an informal letter to the relevant tax office. Founders who register a freelance activity can skip the trade office and the commercial register and are exempt from trade tax. Not always the determination and the demarcation to a normal trade are quite clear – the responsibility for the recognition of a liberal profession lies with the tax office.

However, there are cases where the difference between a freelancer and a trader is minimal. This applies for example to bloggers. If they earn their money as freelance copywriters or journalists, they are freelancers. However, if they participate in an affiliate program, for example product placements on their own homepage with links to online stores, they belong to the traders.

If several freelancers join together, there is the special The legal form of a partnership. It is to be compared with a general partnership (OHG) and thus a partnership, for whose establishment no starting capital is necessary. However, all participants are liable with their private assets. The trade tax exemption for freelancers remains intact even if you set up as a partner company. However, if freelancers establish a GmbH, the trade tax exemption is lost.

Freelance or commercial? Tax office decides

If you are not familiar with the jungle of laws, you can find out which category applies to you with the help of the Income Tax Act § 18 EStG and the PartGG. The tax office also offers free advice in this regard if there is also uncertainty. Ultimately, however, the tax office decides which category you belong to.

How freelancers register independently

An informal letter is sufficient to inform the tax office that a freelance activity is being started and that you would like to register self-employment. The tax office grants a period of four weeks to register one’s self-employment if one has already started it. The following information is required for this:

  • name
  • Address
  • Contact details (telephone number, e-mail address)
  • Date on which the self-employed activity is started
  • Description of the activity carried out
  • Tax identification number

Sample formulation registration freelance activity

Registration of a freelance activity

Dear Sir or Madam,

from [DATE ACTIVITY BEGINNING] I will be working as a [CATALOG OPERATION STATE] for various clients.

Please send me as soon as possible the appropriate form for registering a freelance activity and inform me about the topics of VAT liability and income tax liability for self-employed persons.

In addition, please provide me with a tax number.

With kind regards

Once the letter has arrived at the tax office, you will subsequently receive a questionnaire and your personal tax number. The questionnaire must then be filled in truthfully and returned to the tax office.

How to register as a self-employed person

Registering a trade involves significantly more effort. This requires an appointment at the trade office, but before that it is important to check whether additional permits are required. This information can be easily obtained from the Chamber of Commerce and Industry. Anyone practicing a skilled trade also needs an entry in the Chamber of Crafts and Trades. A processing fee must be paid at the local trade office, which, depending on the city or. Municipality can be between 15 and 65 Euro. In Austria, the cost can be up to 100 euros.

In addition, the following documents should be brought along:

  • Disclosure
  • All necessary permits (depending on the trade)
  • Handicraft card (for handicraft professions)
  • Commercial register excerpt (if trade is registered in the commercial register)
  • Certificate of good conduct

Subsequently, the trade office informs the tax office. You will receive a questionnaire from the tax office, which must be filled out truthfully and returned to the tax office.

Conclusion: To stand on your own professional feet and to become self-employed is not witchcraft. The registration is usually quick and easy. Those who want to take the plunge into self-employment, but do not know in which category – freelance or business – their profession falls, should seek help from the tax office.

But also tax consultants and business incubators offer their help with questions concerning self-employment.

Without obligation and free of charge! (advertisement)

If you want to shorten the waiting time for the registration of your self-employment, you should definitely find out in advance which documents are required. When registering a business, you can, for example, pick up the tax registration questionnaire from the tax office in advance and return it filled out together with the business registration.

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