Useful Information for self-employed
Self-employment
If you wish to work as a self-employed person in Germany or Saxony, you should find out whether you need to register your business. Information about the exact procedure is provided at several different websites, such as www.wir-gruenden-in-deutschland.de or www.bmwi-wegweiser.de .
Your business must be registered with the Gewerbeamt (Trade Office) in your town or city of residence. You will be required to present a current registration certificate and fill out a form in which you are asked to enter all relevant details about the business or trade in question and your own function. Registration fees differ from city to city, and range from 15 to 65 euros.
In order to pursue your trade or business you must have a tax number from the Finanzamt (Tax Authority). It ordinarily takes between 4 and 6 weeks to receive a tax number.
You are obliged by law to issue an invoice for every job you carry out. Every invoice must contain the following minimum information: name and address of the business/trade and the contracting party, your tax number, the invoice number, the type of work or service performed, the amount to be billed and 19% VAT – or a statement indicating that the business or trade is exempt from VAT as a small business (gross income does not exceed 22.000 euros per year).
As a self-employed person, you are required to keep accounts of income and expenses. You must submit a tax return to the Finanzamt every year (regardless of whether you record a profit or not).
If you are now living and working in Germany, you are required to obtain health insurance. You may choose between a private and a statutory health insurance policy.
If you are a male or female craftsman from a different EU/EEA Member State, come from Switzerland, where you run a business, and wish to perform temporary jobs in Germany, you must observe certain rules. You are permitted to render occasional temporary services, but you must meet certain prerequisites if your craft or trade requires a permit. You are also required to notify the Handwerkskammer (Chamber of Trades) if you perform work in a craft or trade requiring a permit.
Work as a self-employed craftsman in a craft or related trade that does not require a permit does not presuppose any specific occupational qualifications. Thus foreign enterprises are entitled to perform such work without showing proof that certain prerequisites have been met and without reporting the activity in question.
Further information on this topic is provided at:
False self-employment
We speak of false, fake or sham self-employment when an individual ostensibly renders independent services in accordance with contractual agreements but actually performs said services as an employed individual. Many freelance workers and independent contractors are actually not self-employed – and don’t realize it. That can have serious legal and financial consequences.
If the authorities determine that you are working as a falsely self-employed person, you will be reclassified as an employed worker. The client for whom you work must pay all back social security contributions and income taxes, and you will be required to pay your own share of social security contributions (for a maximum of 3 months). You may also have to pay a fine, and your client will be subject to a very stiff fine.
Self-employed persons are their own bosses. Unlike employees, they receive no instructions. They are paid for a specific job or service, and not for their time. They negotiate the price for each service or job with their client. They decide for themselves when to take leave, and they receive neither leave pay nor sick pay.
Self-employed persons are required to issue invoices; they maintain their own offices, workshops, etc.; they must purchase their own materials and arrange for all transports themselves.
If you suspect that you may be working in a false employment relationship or are unsure about your status, you should contact an Advisory Centre!
Further information on this topic is provided at:
