Freiberufler in Germany — Registration, Taxes and Obligations

What is a Freiberufler?

A Freiberufler (also: freelancer) pursues self-employed work based on special qualifications or creative talent. The key difference from a business operator: Freiberufler don't need to register a business and don't pay business tax.

Catalog Professions (§ 18 EStG)

The Income Tax Act lists the free professions:

Medical professions:
Physicians, dentists, veterinarians, alternative medicine practitioners, physiotherapists, midwives

Legal, tax and business consulting:
Lawyers, notaries, patent attorneys, tax consultants, auditors

Natural sciences and technology:
Engineers, architects, pilots, experts

Information provision and culture:
Journalists, interpreters/translators, writers, artists, designers

Education:
Educators (self-employed), lecturers, teachers (self-employed), scientists

Similar Professions

Professions that are similar to catalog professions can also be recognized as freelance:

• IT consultant — if working conceptually/as advisor (not: pure programmer → often business)
• Coach / Consultant — depending on qualifications and type of work
• Photographer — if working artistically
• Web designer — if working creatively-designerly (not: pure web shop operator)

Attention: The tax office decides whether your activity is freelance or commercial. In case of doubt: ask a tax consultant!

Advantages over Business Operators

Registration — Here's How

Step 1 — Questionnaire for Tax Registration

As a Freiberufler, you register only with the tax office — no business office needed:

1. Set up an ELSTER account (elster.de)
2. Fill out the questionnaire for tax registration online (within 4 weeks of starting activity)
3. Information: personal data, type of activity, estimated turnover and profit, bank details, small business exemption (yes/no)

Step 2 — Receive Tax Number

The tax office will send you a tax number within 2–6 weeks. With this, you can issue invoices.

Step 3 — If necessary, request VAT ID

If you work with business clients outside the EU, you need a VAT identification number. Application at the Federal Tax Office (bzst.de) — free of charge.

Taxes for Freiberufler

Income Tax

• On your profit (income minus business expenses)
• Advance payments quarterly (March 10, June 10, September 10, December 10)
• Tax return annually (Schedule S)

VAT

• 19% on your invoices (or 7% for certain services)
• Input tax deduction — you can deduct VAT on your purchases
• Small business exemption possible (under €22,000 turnover/year)

No Business Tax!

This is the biggest advantage of being a Freiberufler — you save thousands of euros per year depending on your profit.

Obligations as a Freiberufler

Bookkeeping

• Income-expense accounting — you list income and expenses (simple bookkeeping)
• No balance sheet needed — regardless of your turnover
• Keep records — 10-year retention requirement

Invoices

Your invoices must contain the following mandatory information:

• Your name and address
• Customer name and address
• Tax number or VAT ID
• Invoice number (consecutive)
• Invoice date
• Service description and date
• Net amount, VAT rate, VAT amount, gross amount
• For small business operators: reference to § 19 UStG (no VAT shown)

Social Insurance

Artists' Social Insurance Fund (KSK)

For artists and publicists (writers, journalists, designers, musicians, actors):

• KSK covers the "employer share" of social insurance
• You pay only approx. 50% of health, long-term care and pension insurance
• Requirement: Professionally active as artist/publicist, minimum income €3,900/year

Sham Self-Employment — Beware!

If as a Freiberufler you work primarily for one client, the tax office or German Pension Insurance may determine sham self-employment. The consequences:

• Backpayment of social insurance contributions (up to 4 years!)
• The client becomes your "employer" — must backpay contributions
• Fines for both parties

Typical Signs of Sham Self-Employment

• You work for only one client (more than 5/6 of turnover)
• You are integrated into business operations (fixed workplace, fixed hours)
• You have no own advertising or website
• The client gives you instructions (when, where, how you work)
• You don't employ own staff

How to Avoid Sham Self-Employment

• Have multiple clients (at least 2–3)
• Have your own website and business cards
• Have your own tools (laptop, software, office)
• No instruction dependency — you determine location, time and method of work
• Issue your own invoices (not: time tracking like an employee)

Tips for Foreign Freiberufler

1. Check residence permit — must allow self-employed activity
2. Inform tax office early — within 4 weeks of starting activity
3. Describe your activity precisely — the tax office decides if it's freelance or commercial
4. Check KSK — as artist/publicist you save 50% on social insurance
5. Build reserves — set aside 30% of profit for taxes
6. Tax consultant — worthwhile especially in first year (costs are deductible)

As of: March 2026. All information without guarantee.