Applying for a Tax Number: What Freelancers Need to Know

The tax authority uses this tax number to identify your business — it makes no difference whether you work as a sole freelance practitioner or as a freelance business owner employing several members of staff.

When you begin a freelance activity, you must apply for a tax number. Failing to do so may lead the responsible tax office to treat your conduct as tax evasion. Tax authorities have a legitimate interest in being informed of every new business registration. Only on that basis can they request tax returns and assess tax.

Tax authorities assign every resident a personal tax identification number (Steuer-IdNr.) at birth or upon immigration. This eleven-digit number remains valid for life and does not change when you move address.

When the tax identification number was introduced in 2007, the government planned that it would replace the previously customary tax numbers. That plan was subsequently abandoned. Whether you are a freelancer or an employee: alongside the tax identification number, you continue to require an additional tax number for each source of income.

The structure of the thirteen-digit tax numbers is standardised across Germany. They consist of the following elements:

- Federal tax office number

- District number

- Personal identification number

- Check digit

On moving address or upon other events such as marriage and a subsequent joint assessment, the tax number may change.

If you intend to work as a freelancer in future, notify your tax office using the tax registration questionnaire. You may also leave completion of this document to your tax adviser. The tax authority uses this document to gather all relevant data. This includes the question of whether you wish to apply the Kleinunternehmer scheme. You also use this form to apply for a VAT identification number (Umsatzsteuer-Identifikationsnummer), if you require one.

The tax office will then automatically send you a tax number. Any VAT identification number will be issued by the Federal Central Tax Office (Bundeszentralamt für Steuern).

You have one month from the date you commence trading to submit the tax registration questionnaire electronically. In practice, this means you can already be working as a freelancer and generating income before you submit it. It is best, however, to attend to this task early on. Remember that you must, for example, state your tax number on invoices. Your Guhr Steuerberatung will support you with this requirement when setting up your business.