On being self-employed in Germany: Freelance vs. Trade (Red Tape Translation)

On being self-employed in Germany: Freelance vs. Trade

If you write your own invoices, if you have multiple clients and if you make your own hours then you are self-employed. The difference is that in Germany, they divide it up into two further categories, you're either freelance or you have a trade.

What do freelancers do?

Freelancers are in professions that rely on the transfer of knowledge, fields like humanities, arts, science, law, so for example if you're a dentist or a musician, or a doctor, a writer, translator, language teacher you're probably a freelancer.

What's a Gewerbe?

Tradespeople work in professions that aren't "freelance", there is actually a list you can find that defines what is a freelance profession and if you're not on it, then you're most likely a tradesperson, in which case you need to register your trade with the chamber of commerce and you will also be treated differently for tax purposes.

Can I be both?

It is possible to be both, yes, you can work in a profession that's freelance and one that is a trade, you just need two different tax numbers.

How do I figure out where I fit in?

If you're confused, that's OK, there are all sorts of grey areas, sometimes the Finanzamt gets it wrong, sometimes the foreigner's office can't figure it out, your best bet is to get advice from a tax advisor.

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