Freelancer: Definition and Job List for a life without trade tax

Freelancer or not? All information in brief

No business registration, no business tax, no double bookkeeping: The advantages of a freelancer over a trader are obvious. But how do you actually become a freelancer? What are the requirements or legal hurdles to be officially recognized as a freelancer? Here you will find all information about freelancers at a glance – understandable, comprehensive and detailed.

A brief explanation of freelancers

Freelancers pursue activities that are not subject to the trade regulations. So it can be artists, writers, freelance teachers etc. who offer their services on an independent basis.

You pay without exceeding an allowance taxes. However, a tax return is absolutely necessary. Therefore, it is necessary to apply for a tax number at the tax office. Employment relationships are also possible, but the remuneration is paid on invoicing by the freelance employee. You can choose the small business scheme if you do not exceed a certain level of income.

The determination requires the conscientious, written comparison of income and expenditure, which is called the income-surplus calculation. This can be done with a cash book or on a PC with software. The tax return and bookkeeping are prepared by yourself or a tax advisor is commissioned.

In contrast to traders, freelancers do not pay any trade tax. Social insurance is either private or voluntary by law. Even if a freelancer hires an employee, his tax position remains the same. The prerequisite is, among other things, one’s own professional qualifications and independent activity.

In principle, freelancers can choose whether they want to take out statutory or private health insurance. You have the option of voluntarily taking out statutory health insurance if you have been insured with statutory health insurance for at least 12 months immediately or in the last five years for at least 24 months. As a rule, however, freelancers opt for private health insurance for reasons of cost.

Freelance Summary: This is what the Freelance Privilege is all about

The freelancer differs infive essential points from the trader:

  1. He pays no business tax.
  2. He does not have to register a business.
  3. He does not have to keep double-entry bookkeeping (a revenue-surplus account is sufficient).
  4. He is not a compulsory member of a Chamber of Commerce and Industry (IHK).
  5. He can set up a partnership with other freelancers.

Who exactly is a freelancer?

A first approximation results in a definition that can be found in the Partnership Law (PartGG), namely in Section 1, Paragraph 2: “The liberal professions generally have a personal, self-reliant and professionally independent provision on the basis of special professional qualifications or creative talent of services of a higher kind in the interest of the client and the general public to the content. ”

Section 18, Paragraph 1 of the Income Tax Act (EStG) becomes more specific: This paragraph distinguishes three groups among freelancers:

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

Catalog occupations:

Four occupational groups fall into this category

  1. Medical professions: Doctors, dentists, veterinarians, naturopaths, physiotherapists, midwives, therapeutic masseurs and qualified psychologists
  2. Legal, tax and business advisory professions: lawyers, patent attorneys, notaries, auditors, tax consultants, tax agents, advisory economists and business administrators and sworn accountants.
  3. Scientific and technical professions: surveying engineers, commercial chemists, architects, pilots and experts.
  4. Cultural professions: journalists, photo reporters, interpreters, translators, scientists, artists, writers, teachers and educators.

Catalog-like professions

In terms of their requirement profile, these professions largely correspond to the catalog professions: They require higher education. There is always an individual examination. For example, tax courts have ruled that the following professions are freelance: occupational therapist, conductor, photo designer, masseur, riding instructor, actor, copywriter or fashion designer (not a complete list).

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