Freelancer, self-employed, and small business in Germany: Same or Different?

Very often visa applicants are confused about the terms: am I a freelancer or self-employed? Can I get an artist visa if I'm an IT-developer/consultant/etc? 



In terms of residence permit, it’s all the same; in terms of taxation and accounting, they are surely different. Basically, for the German tax law, they are self-employed, and then they are divided into two main categories: liberal professions/Freiberufler and traders/Gewerbetreibender. 


Freiberufler/ a self-employed in “liberal professions”

- uses their special qualifications, skills, and inspiration to earn money; artistic, creative, or scientific type of work, e.g. writers, teachers, consultants, translators, all artists, designers, doctors, IT people, etc. There’s a list of professions in the German Tax law.

Focus: services for individuals (b2c): e.g. private classes of German, selling pictures to gallerists.


Freelancer

- a self-employed, “an independent co-worker”, works on a fee basis as a contractor, but not in the staff, e.g. specialists in IT, media, or advertising. There's no legal definition of this type of work in Germany, it's basically an individual, working on a project base.

Focus: products and services for companies (b2b), a website, and its support, a media campaign. It’s not a legal term in Germany.


A Freiberufler ("liberal profession") works as a freelancer/contractor when he/she is hired by a company from time to time, e.g. to give a language class for employees, to draw a series of pictures for a new office building, to write content for a project. But it doesn’t change their status.


Gewerbetreibender/tradesmen

- a self-employed who doesn’t belong to “liberal professions” listed in the Law, e.g. a local flower shop owner, an online store, an influencer on Instagram, a food delivery driver. Always needs a Gewerbeschein (trade license), pays a trade tax when earning more than 24500€ profit a year

Focus: selling goods, earning profit.


A Freiberufler ("liberal profession") is never a tradesperson, but some freelancers (“Independent co-workers”) should be registered as traders if the Tax Office decides so.


Freiberufler/ freelancers and traders can be small businesses “Kleinunternehmer” with a year income no more than 20000€ - and have some benefits:

  • no registration in the Handelsregister, the German Trade Register needed.

  • no obligation to charge VAT

  • no double-entry bookkeeping

Benefits:

  • Simplified bookkeeping

  • No registration in the Handelsregister, the German Trade Register.

  • No Gewerbeschein (trade license)

  • No Gewerbesteuer (trade tax)



Do you know now which category you belong to? Or still not sure? Claim your consultation with me where we go through your unique case together and get ready for your freelance visa application. Email me contact@marialupandina.com

Disclaimer: The article is not legal nor tax advice. It’s solely based on my own experience.Design and graphics: created by me (Maria Lupandina) onCanva.com (not affiliated). First image - background photo free fromCanva.com


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