Advisory Engineer — Freelance or Commercial Activity?

This question is not easy to answer. In principle, the engineering profession is one of the catalogue professions listed in § 18 para. 1 EStG. In this provision, the legislator gives examples of the liberal professions. This might suggest that advisory engineers are always freelancers. It is not, however, that straightforward. What matters is the specific content of the advisory work and, overall, the nature of the services provided.

If you wish to offer advisory services as a freelance engineer, you will need the relevant professional expertise. You can demonstrate this, for example, with a completed degree in engineering science. The authorities may also recognise self-study, provided you have simultaneously accumulated practical professional experience in this field. It is important that you possess specialist knowledge across all core areas of engineering training.

In addition, tax offices and trade licensing offices examine the subject areas on which freelance engineers advise. There must be a clear connection between the content of the engineering training and the advisory offering. Advisory engineers with freelance status provide support in areas including the following:

- Research and development

- Project planning

- Design and construction

- Manufacturing

- Technical administration

Do you wish to support your clients as an engineer with business management advice? In most cases you will be regarded as a trader. There is, however, one exception: the advisory business economist is a further catalogue profession within the liberal professions, to which you may be able to have recourse in appropriate circumstances. This does, however, require the relevant business management expertise. There are two ways to acquire it:

- Following your engineering training, you complete an additional qualification in business management.

- You acquire business management knowledge through self-study and accumulate professional experience in this field. The relevant authority will assess whether you possess a sufficiently broad range of business management knowledge. It is not sufficient to cover individual subject areas such as marketing.

If you work as a freelance advisory engineer, you benefit from several advantages. It is therefore in your interest to establish, before setting up in business, whether you meet the criteria for freelance status.

The three key advantages of freelance activity are:

1. 1You do not need a trade licence — the administrative burden of applying for one does not arise.
2. 2You do not have to pay trade tax or file trade tax returns.
3. 3The tax office is satisfied with a cash-basis income statement (EUER) regardless of your turnover.

When classifying advisory engineers as freelance or commercial, there are many borderline cases: it is best to contact an experienced tax expert! The team at Guhr Steuerberatung will provide a well-founded assessment of your situation and offer many valuable tips.

etig/Beratender-Ingenieur-freiberufliche-Taetigkeit.html