Founding09 February 20265 min read

Registering as a Freelancer: What You Need to Know

Anyone planning to be their own boss as a freelancer has a number of advantages over other self-employed persons: there is no requirement for a balance sheet, no trade tax liability, and no entry in the commercial register.

ByKarsten Guhr · Managing Director & Tax AdvisorVerified article

#Freelance#Activity#Registration

Nevertheless, prospective business owners must fulfil certain obligations when registering their freelance activity. These tips will ensure you are well prepared for the registration process.

For many professionals, freelancing offers a comfortable way to start out as self-employed. However, freelance status is not available to all self-employed persons.

It is reserved for certain professions — which ones is determined by the legislature and by case law. The so-called "liberal professions" (freie Berufe) encompass above all scientific, artistic, educational, teaching, and literary activities (§ 18 para. 1 no. 1 EStG).

They are based on special professional qualification or creative talent.

**What are the liberal professions?**

The tax authorities decide on the basis of a catalogue whether an activity qualifies as freelance. The so-called "catalogue professions" (Katalogberufe) include, for example: Authors Journalists Copywriters Graphic designers Translators Musicians Physiotherapists Midwives Non-employed teachers Doctors (including dentists and veterinarians) Solicitors Notaries Auditors Pilots Architects Beyond these examples, there are further professions that the tax office classifies as freelance activities. Work as, for example, an IT consultant, VFX designer, or management consultant is also regularly classified as freelance. Before registering a trade (Gewerbe) as a freelancer and thereby sending the tax officials in the wrong direction, it is best to contact Guhr Steuerberatung in Berlin. Our team will support you in starting out as self-employed and advise you on all further tax-related questions.

As a general rule: start-ups wishing to begin a freelance career can save themselves a trip to the trade licensing office and the commercial register. Registration with the tax office alone is entirely sufficient to obtain both a tax number and a VAT identification number.

You must register with your locally competent tax office no later than four weeks after commencing your freelance activity.

Today this is usually done electronically via the ELSTER portal, though it can also still be done by PDF or in paper form.

During the registration process, various details are requested that are primarily aimed at determining whether you are to be classified as a trader or as a freelancer, whether you should make advance income tax payments, whether you need to charge VAT and submit advance VAT returns, or whether you may be classified as a small business (Kleinunternehmer).

If you wish to work as self-employed in a profession subject to a statutory professional chamber (kammerpflichtiger freier Beruf), you must register with the relevant chamber as a freelancer. This applies to all freelance doctors, architects, engineers, tax advisers, and auditors.

Professions subject to a statutory professional chamber are often tied to mandatory membership of the relevant occupational pension scheme (Versorgungswerk) — membership gives rise to pension insurance contribution obligations.

If you work as a freelance teacher, harbour pilot, or midwife, you are also required to make compulsory payments to the pension insurance scheme. The reason: these professions are considered to be particularly in need of protection.

Freelancers working in other fields are free to pay into the statutory pension insurance scheme or to make their own private pension provision.

The Artists' Social Insurance Fund (Künstlersozialkasse, KSK) is the statutory health insurance scheme for freelancers in the creative and media sector. Freelance journalists, authors, and those working in the arts are insured here to receive benefits when needed. Please note: anyone who meets the conditions for membership is required to take out insurance there.

Half of the contribution is paid by the freelancer. The other half is contributed by the federal government and by companies that exploit journalistic and artistic works — typically publishers, broadcasters, and galleries.

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How do I register as a freelancer?

The first step into freelance work is registration with the tax office. No later than four weeks after commencing your freelance activity, you must either visit the tax office in person or complete the registration online. The latter is possible either through the websites of the local tax offices or via the online portal ELSTER. Other important points of contact for newly registered freelancers are the professional statutory chambers, the pension insurance bodies, and, where applicable, the relevant trade cooperative (Berufsgenossenschaft).

What do I need to do to become a freelancer?

The possibility of pursuing a freelance activity is, pursuant to § 18 para. 1 no. 1 of the Income Tax Act (EStG), tied to certain industries and fields of activity. A freelance activity may be pursued by, for example, authors, artists, and journalists, but also doctors, midwives, architects, solicitors, notaries, engineers, and interpreters. The tax authorities consult a catalogue of "liberal professions" to decide whether an activity qualifies as freelance.

Is freelance the same as self-employed?

Working self-employed does not necessarily make one a freelancer. Freelance status applies only where the activity carried out falls within the so-called liberal professions. Whether this is the case is determined by a catalogue held by the tax authorities. The counterpart to freelance status is commercial activity (gewerbliche Tätigkeit). This applies where a self-employed person manufactures or sells products. Mixed forms can also exist.

When must I file a tax return as a freelancer?

You have until 31 July of the following year to submit your tax return. This deadline is regularly extended (for example, most recently through COVID-related provisions and special arrangements for tax advisers). It is advisable, however, to prepare the tax return promptly once the calendar year has ended, even where an extension applies. This is because — particularly at the start of self-employment — individuals can often not yet properly assess their tax obligations. We have unfortunately seen on many occasions that freelancers start out on their own, put off the unwelcome subject of tax for a long time, and then come to us only when they are faced with numerous problems. Where financial circumstances allow, it is therefore advisable to engage a tax adviser from the outset — both for the initial tax registration and on an ongoing basis — in order to keep your finances under control and to make full use of all available tax optimisation opportunities. Please do not hesitate to get in touch!

Header image: Source Pixabay - Pexels.com

About the author

Karsten Guhr · Managing Director & Tax Advisor

Founder of the firm. Advising entrepreneurs and holding structures on tax planning, structuring and succession for 15+ years.

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Registering as a Freelancer: What You Need to Know

Taxes not your thing? Then they're ours.

Karsten Guhr · Managing Director & Tax Advisor

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