German Self-Employment Visa: How to Register for Self-Employment in Germany
As you know that there are only two things certain in life — death and paying German taxes.
Before you earn a single penny from your freelance or trade, you have to register for self-employment in Germany. This is done at your local tax office or Finanzamt. Successful registration at Finanzamt allows you to send your clients the invoices or sell your goods and services legally. And get paid. And then get taxed.
There are three key tax numbers that you need in order to register successfully as a self-employed entity in Germany.
1) a German Tax ID Number
2) a German Tax Number
3) a VAT number (circumstantial)
Before starting with any of these steps, make sure you are already registered as a resident in Germany and own a bank account. And of course, at this point, you should already hold a valid visa that allows you to take up gainful self-employment. If your residence document does not explicitly permit gainful employment (Erwerbstätigkeit gestattet) or self-employment (Selbständige Tätigkeit gestattet), you are not allowed to work as self-employed.
The steps in this guide are written under the assumption that you meet all the requirements of the German self-employment visa.
Registering at the local tax authorities is a tax-related process. It has very little do with immigration status or nationality. When it comes to taxes in Germany, everyone is equal. Only your income and profession are of the utmost concern of the Finanzamt.
Let’s break it down and go through the process step by step.
Step 1. Apply for Your German Tax ID Number
Also known as Steuer-ID (Tax ID) or Steueridentifikationsnummer (Tax ID number) or Identifikationsnummer (Identification Number). Anyone and everyone in Germany- freelancer, business owner, or a salaried, or intern, need this number to be able to work, get paid & pay taxes according to their tax bracket. According to Federal Central Tax Office or Bundeszentralamt für Steuern,
All individuals receive an 11-digit identification number to ensure their unique identification within the German tax system. The number will not change if you move home or marry. It will be attached to you for your whole life. It does not contain any information about you or the tax office responsible for your tax affairs.
This tax ID number comes in a XX XXX XXX XXX format. You receive this tax ID by snail mail roughly two weeks after registering your address for the first time in Germany. If you somehow misplace this number, you can request your German tax ID very conveniently through this online form. Bear in mind that it’ll take a few weeks to process your tax ID. You can receive it in about four weeks or more to obtain the tax ID by post mail. Read more information about the tax ID here!
Step 2. Apply For your German Tax Number (by Registering at Your local Finanzamt For Self-Employment)
Let’s get something out of the way — Your German tax number (Steuernummer) is different from the German tax ID Number (Identifikationsnummer) mentioned above. You need the latter to have the former. So make sure to apply for your tax ID a few weeks in advance. Your Steuernummer comes in a XX/XXX/XXXXX format. Only self-employed people and businesses need this tax number. Once you have your Identifikationsnummer, you can start the registration process at your local Finanzamt.
This registration procedure requires submitting a completed Tax Number Registration Form, called “Fragebogen zur Steuerlichen Erfassung” at the nearest Finanzamt of the city where you’re registered as a resident. I will cover the line by line instructions in a separate post.
It is possible to fill the form online on the website of Bundesministerium der Finanzen. Note that, each session is valid for 45 minutes only. If you take longer than this, the form will refresh and you will lose all your data. If you use this option, then I would recommend to first fill up all values in a paper sheet, and then add in your online form. Once filled, you can download the form and print it out.
In summary, to fill this form completely, you should have some basic details ready.
- Your German tax ID number or Identifikationsnummer (again, not tax number or Steuernummer)
- Your personal details
- Your bank details
- An exact description of your future self-employment activity
- Financial details of your future self-employment activity
Unlike your Identifikationsnummer, your Steuernummer is not permanent. If you move your business to an area served by a different Finanzamt, you will need to get a new one Steuernummer. Which means, going through the same process all over again.
It doesn’t matter whether you’re earning a few euros from your clients, you have to report your earnings to Finanzamt. Self-employed entities either pay taxes annually or in advance. Yes, that’s correct! You may have to pay a Steuervorauszahlung or Tax Prepayment. Your local Finanzamt estimates this prepayment based on your estimated income from your self-employment.
Umm…let me explain this in a separate post to avoid information overload.
Step 2.1. Determine Your Responsible Finanzamt
This one is easy! You can search for your responsible Finanzamt by using search terms ‘your city’ + Finanzamt. Usually, the first search result will be correct. If you live in a big city, you may see multiple Finanzamt offices like ‘Finanzamt Nürnberg-Süd’, ‘Finanzamt Nürnberg-Nord’ and ‘Zentralfinanzamt Nürnberg’. In such cases, just type in ‘your district + ‘zuständiges Finanzamt’. Sometimes typing in with your postcode can also lead you in the right direction.
Step 2.2. Determine Your Self-Employment Type
Note how I have been using the phrase ‘self-employment’ and ‘self-employed entity’ throughout this post. That is because in Germany self-employment is divided into certain categories and sub-categories. Before you fill this form, take some time to determine what kind of self-employment you fit in — Freiberufler or Gewerbe? Here is a summary of the two.
A freelancer is a self-employed person who practices one of the categorised free professions (freie Berufe). Only certain professions are categorised as freie Berufe in Germany. They are considered to be more elaborated and sophisticated services. They are regulated and you require a license to practice them. In German, they are called catalogue professions (Katalogberufe). Some of the classic Katalogberufe are:
- Medical professions: e.g. doctor, dentist, physiotherapist
- Law and business counselling professions: e.g. tax counsellor, lawyer, notary
- Scientific-technical professions: e.g. chemist, engineer, architect
- Media and language professions: e.g. translator, interpreter, journalist
See the full list here (scroll to page 8)
If your profession is not listed in catalogue professions, you may wanna take a look at the ‘similar (to) catalogue professions’ (Katalogähnliche Berufe or ähnliche Berufe). They are called ähnliche Berufe because they are similar to the catalogue professions. By this is meant: The training or the concrete professional activity is comparable with a catalogue occupation. You can find the entire list of ähnliche Berufe in this list (scroll to page 9).
Independent professions that are similar to catalogue professions or considered to be scientific, artistic, literary, pedagogic or educational activities are also counted as freelancing professions. If you work in a profession that is categorised as a freelancing profession, you are a “Freiberufler” or freelancer.
If you want to work as self-employed in a profession that is not in any of the above categories, you have to register as a business owner (Gewerbetreibender). Based on how you describe your profession in the registration form, your Finanzamt will either recognise you as a freelancer (Freiberufler) or a trader (Gewerbetreibender). In case, you are a trader, then you will register at the local Trade Office (Gewerbeamt), and NOT Finanzamt.
As mentioned in my German self-employment visa requirement post, getting your self-employment status right is very critical and can impact your tax and yearly accounting when the time comes.
Step 2.3. Determine If You Need a VAT Number (Umsatzsteuer-Identifikationsnummer)
The Umsatzsteuer-Identifikationsnummer, USt-Identifikationsnummer or USt-IdNr. is the German term for the VAT number. It’s a 9 digit number with the format DEXXXXXXXXX.
You also get a VAT number by filling the Fragebogen zur Steuerlichen Erfassung. As of January 2018, if your annual income is lower than 17.500 Euro, you are classified as a small business owner and therefore will be exempt from income tax.
You will not get a VAT number if you declare yourself as a small business owner (Kleintunternehmer) since small businesses do not need charge VAT. “Kleinunternehmerregelung” means small business regulation. Generally speaking, if you create economic revenue by your work, you have to pay taxes. Income tax (Umsatzsteuer) is often unofficially called “Mehrwertsteuer” or “added value tax” in Germany.
Step 3. Submit Your Self-Employment Registration Form to Finanzamt
Once you have completed this form, check and recheck the details to make sure you have added accurate info. Once done, you are now ready to submit your form to your responsible Finanzamt. Make sure that you have your Finanzamt office correctly located.
You can deliver this form in person to the Finanzamt. No appointment is required for this, but make sure to check the opening times on the website. You can also mail this form to your responsible Finanzamt. Use registered mail for sending the form and all attachments.
You should receive your Tax number (Steuernummer) and VAT number (Umsatzsteuernummer) by mail in about a month. My first time registering went quite fast, and this was in Ilemnau, Thuringia. The second time was in Bavaria. That took almost two months to receive my tax number (and they sent me two different tax numbers in one mail! 🙄). In my experience, it helps to call the Finanzamt and follow up with them on your case.
Please note that you are required by German law to add your tax number and VAT number to your business website’s Impressum page. Not doing so could result in hefty fines to some German law sharks.
Have you ever registered for self-employment in Germany? If yes, how was your experience? Did you find it complicated or was it a breeze for you? Let us know in comments.
Originally published at mademoisellein.de on February 21, 2019.
