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Whether you’re a national from within or outside of the European Union, before you can take up freelance work in Germany, you must be registered in order to do so, according to “Make it in Germany,” a government-owned website for skilled workers looking to come here.
This is in spite of the fact that EU citizens have unrestricted access to the German labour market and can take on work without requiring a visa or a residence permit in the country.
So if you come from inside the EU, the first step is to register your business by filling out a form at your local district office (Bezirksamt).
The second step would be to make your way to the tax office (Finanzamt). Here you’ll have to fill out a lengthy document where you declare things like your expected salary, how you intend to build your business and your education and qualifications.
Although writer Grant Price registered as a freelancer with the tax office in Berlin eight years ago, “it’s still pretty rigorous today,” he tells The Local.
“I got a tax advisor to help me,” the UK national says, adding that prospective freelancers should do the same - particularly if their German-language skills are not yet up to par since the document is in German.
Before internationals coming to Deutschland from outside the EU can even think about taxes, they must tackle the first hurdle of registering as a freelancer in Germany: applying for a visa. Eligibility to do so depends on a person’s country of origin.
Citizens of the majority of non-EU countries seeking to obtain a visa for the purpose of freelancing in Germany must do so in their home country at the nearest German embassy or consulate, according to Make it in Germany. This mission will tell you what documentation you need to submit.
After sending your visa application to the foreigner’s office at your future place of residence in Germany and after possible consultation with associations or agencies, your local German embassy will then let you know their decision.
If you’re granted an entry visa, which could take up to four months to process, it it will likely be valid for three months. This means that once you arrive on German soil, you’ll need to convert it to a residence permit if you’re keen on freelancing for a longer period of time.
Applying for a freelance visa
Meanwhile people from certain countries - Australia, Canada, Israel, Japan, South Korea, New Zealand and the USA - are allowed to apply for a freelance visa after they have arrived in Germany (i.e. within ninety days of entering the country as a tourist).
Those seeking to do so should first book an appointment at the foreigner’s office (Ausländerbehörde), explains Rachel Stern, an American journalist who applied for her first freelance visa several years ago. Depending on the city you live in and how busy its foreigner’s office is, it could take weeks until the earliest appointment is available. Once an appointment is booked, you can remain in Germany until the date - even if it exceeds three months.
For Stern, who had applied for her German residence permit in Berlin, it wasn’t as simple as filling the prerequisites and submitting all the required documents in order to obtain the freelance visa.
“It seemed easy on paper, but they kept asking for more and more documents,” the Californian says, adding that she had to visit the Ausländerbehörde multiple times to submit more paperwork.
Ironically it’s easier to get your first freelance visa - which is usually issued for one to two years - than it is to renew it later on as you’ll have to submit more proof regarding your income and taxes paid on it, according to Stern.
What you’ll need to apply for a freelance visa
If you’re planning to apply for a freelance visa within Germany, be warned. Some of the documents you need to submit might be tricky to get.
You’ll need at least two freelance "job offers" in the field you want to work in, which have to be in German and also show how much you’ll earn per assignment or hour. Depending on the city in which you live, “they will want to see that you’ll have at least €800 coming in each month,” Stern says.
You should also have some sort of qualification and references backing up that you have previously done this kind of work.
Another important document you’ll need to show is proof that you have registered your address (Meldebescheinigung). This can be done by making an appointment at your local residents’ registration office (Einwohnermeldeamt).
In order to register your address, however, since November 2015 it is required to show a copy of your housing contract (Wohnungsgeberbescheinigung). This can mean a possible catch-22 situation for non-Germans as you will usually need a pre-existing Meldebescheinigung in order to become the main person on a flat rental contract.
SEE ALSO: How one piece of paper holds the key to your future in Germany
For both EU and non-EU citizens, health insurance is a legal requirement in Germany and you must show proof of it in order to register as a freelancer in the country.
For digital nomad Paige Rollison, who wrote about her experience getting a freelance visa in the German capital last year, “traveller’s insurance does not fly as your form of health insurance for the visa application.”
You need something legitimate and “German providers are preferred,” according to Rollison.
Grant Price agrees. “You have to show proof of health insurance on the initial registration form and it has to be German. I had a British one beforehand and they didn’t accept it,” the writer tells The Local.
“A health insurance adviser can inform you of the different options available to you,” he adds. “That’s what I did a few years ago when I switched from state to a private health insurance provider.”
There are two options in Germany when it comes to health insurance - state health insurance companies or private ones - and freelancers may go with either of them. However, it is important to check that your private health insurance is accepted; since 2016 the Ausländerbehörde has become stricter about the types of health insurance it accepts and no longer grants visas to freelancers with previously popular foreign insurance such as ALC or Mawista.
Freelancers such as artists, journalists, teachers, etc. can apply to join the state-funded Künstlersozialkasse (KSK) that acts like an employer and tops up your insurance and pension payments. Depending on your income, the KSK reduces the amount you pay each month.
The two types of self-employment in Germany
Particularly when it comes to getting health insurance or charging Value Added Tax (VAT), knowing the difference between the two types of self-employment in Germany - Gewerbetreibende (tradesperson) or freiberuflich (freelancer) - is important. This is because you’ll need to register as one or the other regardless of if you’re an EU national or not.
A Gewerbetreibende often registers a business that involves offering a product and either building, selling or trading physical things. Tradespeople are also required to submit a business plan or a profile of their company since they’ll be creating work for various businesses and not just their own.
If this doesn’t sound like what you aim to do, you are likely to be after a freiberuflich resident permit, which typically applies to professions such as programmers, translators, designers, writers, journalists, etc.
Getting your German ID number and tax number
Assuming at this point you have submitted all the necessary documents and you are all set to start taking on freelance work, Germans and non-Germans alike will need two more things in order to declare their taxes: an identification number (Identifikationsnummer) and a tax number (Steuernummer).
After you’ve registered your address and the Federal Central Tax Office (BZSt) gets this information from your local residents’ registration office, you will be assigned and sent an ID number.
The process for obtaining a Steuernummer is different in that you have to fill out a form for it at your nearest tax office, after which the number will be sent to you within a few weeks.
Not only is your Steuernummer necessary to file your tax return, you’ll want to have it when you start working as it might be tricky to invoice a client without one.
VAT: to charge or not to charge
Once you’ve finally started taking on freelance gigs and the income’s rolling in, a key thing to watch out for is whether or not you’re making more than €17,500 a year.
If you are, you must start charging your clients VAT (Umsatzsteuer/Mehrwertsteuer) on your invoices going forward, putting it aside and paying it to the tax authorities.
The amount of sales tax you charge depends on the work you are doing. In general, those earning over the threshold must charge clients another 19 percent on top of their fee.
Freelancers earning less than €17,500 per year may be able to avoid this scheme altogether by adopting the "small business rule" (Kleinunternehmerregelung), meaning that they don’t need to add VAT to their invoices.
The next thing to eventually think about is paying taxes. This can be a bit of a nightmare for freelancers as it requires them to save and file all their receipts, statements and invoices in a sensible way from the get-go.
If this is overlooked, it can get messy when it comes time to tell the authorities about your earnings in a tax return. Well before tax filing season arrives (the deadline is May for the previous year's return), it might be wise to start thinking about getting your documents together.
Throughout the year, hoard up any receipts you may get for business-related items (phone bills, stationery, office equipment, business lunches, train tickets, etc.) Many outgoings are considered business expenses as a freelancer; if correctly documented these expenses can be deducted from your taxable profit.
For the return itself a popular choice among foreign freelancers is to employ a tax adviser. This might seem expensive at first but getting your return done professionally may in the long run save you lots of time - not to mention unnecessary stress.
“Getting a tax advisor is important as they’ll know how to save you money," says Price. "Even the fees for the advisor can be claimed on your taxes.”