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When do I start working as a freelancer?

The decision of whether to give someone the liberal professions heard is not always easy. Often it is a legal gray area that reveals a not inconsiderable scope for interpretation. The Partnership Society Act (PartGG) defines the liberal profession in a legally binding manner as follows: "The liberal professions in general have on the basis of special professional qualifications or creative talent the personal, responsible and professionally independent provision of services of a higher kind in the interests of the client and the general public on the content. "
 

What is the definition of liberal professions?

The Federal Association of Liberal Professions (BFB) defines as follows: "Due to special professional qualifications, members of the liberal professions provide intellectual and ideal services in the interests of their clients and the general public, personally, independently and professionally."

In summary, freelancers are about special professional qualifications feature. You have full professional decision-making power in your work and are responsible for the quality of your performance alone responsible. Your income is referred to as the fee and is often based on the fee schedule of the respective professional group.

What are the prerequisites for being a freelancer?

When do you start working as a freelancer, emerges from Section 18 of the Income Tax Act. There will be Catalog jobs, catalog-like professions and so-called Occupations called. Who falls under this with his activity, can be recognized as a freelancer. The final decision has to be made by the responsible tax office, to which a corresponding application has to be made in any case before starting work. Liberal professions set a certain level qualification or. Height of creation ahead. In practice, it is critical for freelancers to have their Services with their special professional qualifications provide yourself.


Who decides if I am a freelancer?

The classification as a freelancer is exclusively determined by the Tax office performed. This in turn is based on the definition in the Income Tax Act. There will be very specific freelance activity groups differentiated.

  1. Catalog jobs
  2. catalog-like professions
  3. Occupations


In Section 18 of the Income Tax Act you can find the listing of all Catalog jobs. These include health professions and advisory professions in the field of law, taxes and economics. There are also scientific and technical professions as well as information-conveying and linguistic professions.


What are catalog-like professions?

There are also a number of freelancers catalog-like professions. It is crucial that the occupation practiced is comparable to a catalog occupation. These include, for example, occupational therapists, graphic designers and copywriters.

The job market is constantly developing and in some cases completely new job profiles are emerging. Therefore, freelancers today are also in such a way specified Occupations active. Scientific, artistic and writing activities are representative here. It is not always possible to tell at first glance whether it is a freelance job. It depends on the individual case and the tax office decides. Advice from a tax advisor or lawyer can be very helpful.
 

What are the advantages of freelance work?

Freelance self-employment has advantages over self-employment. Because anyone who is a member of a liberal profession within the meaning of the EStG must:

  • no Register business

  • not a compulsory member of the IHK become

  • not be entered in the commercial register

  • Pay sales tax only when the money is received

  • do not operate double-entry bookkeeping


Mixed activity as a freelancer: what should be considered?

In this special case, income from self-employment must be recorded separately for accounting purposes if there is professional and commercial income. In this context, there is also talk of a separable mixed activity if there is no direct connection between the activities. As an example, a freelance translator could run a pension (= commercial activity) on the side. In this scenario, the income generated can be clearly assigned to an activity. In the tax return to be submitted, the activities would have to be listed separately in Annex S and G.


That's what freelancers should do for the retirement provision to do

There are also differences between freelancers and traders in the area of ​​old-age provision. Some of the self-employed are compulsorily insured in the statutory pension insurance. These include independent teachers, masseurs, midwives, sea pilots and educators. Independent doctors, alternative practitioners and speech therapists, as well as lawyers and notaries, are not subject to statutory health insurance. Artists and publicists have their own statutory pension, health and long-term care insurance - the artists' social insurance. The KSV is compulsory insurance. Anyone who meets the requirements for admission to the KSV must also take out insurance there.
 

What are the requirements for artists' social insurance?

Artists and publicists who a annual minimum income of 3,900 euros have, employ a maximum of one employee and work mainly in Germany, are insured in the artists' social insurance. If a self-employed artist or publicist does not achieve the minimum annual income, he is exempt from insurance. The freelancers who are not compulsorily insured in the statutory pension insurance can insure themselves in professional pension schemes. In some federal states there are also compulsory professional pension funds especially for self-employed engineers and psychological psychotherapists.
 

Summary and FAQ on liberal professions: everything you need to know at a glance

  1. When do I work as a freelancer?

The self-employed are self-employed or are considered freelancers if the responsible tax office classifies them as such. For this purpose, an informal application must be submitted before starting self-employed or freelance work. Evidence of special abilities can be helpful in order to be recognized as a freelancer due to a special talent (= creative height). Paragraph 18 of the Income Tax Act constitutes the legal basis for a decision to be made. Further information can be found in Paragraph 1 of the PartGG.
 

  1. What does it mean to be a freelancer?

As a rule, it is a self-employed activity that is of an artistic, scientific, educational, teaching or even writing nature. Those who are recognized as freelancers do not have to register a business and can take advantage of bookkeeping facilities.
 

  1. Which activities belong to the liberal professions?

If you want to get a concrete impression and check your own requirements, you should take a look at Section 18 of the Income Tax Act. Apart from catalog occupations and catalog-like occupations, occupations have played an increasingly important role in recent years. It is often not clear here whether this is a freelance activity. Numerous court rulings on the question 'When will I be a freelancer' can be found online, which can provide orientation for your own situation.
 

  1. What taxes do I have to pay as a freelancer?

Income from freelance work is subject to income tax. In the tax return to be submitted annually, they must be stated under “Income from self-employment”. As a rule, a simple income excess calculation is sufficient for this. If the small business regulation is not used at the beginning of the activity, sales tax is to be levied as a transitory item. For this purpose, the regulations relating to the VAT advance registration must be observed.
 

  1. Is a business registration an option for freelancers?

Again and again there are initiatives or politicians rushing ahead who demand that freelancers also be required to trade. So far, however, it is at most that a business registration is necessary for non-freelance activities. In the case of a mixed activity, the income would have to be recorded separately for accounting purposes.