Freelance or Small Startup in germany
I want to open a small company (potentially just Freelance) in germany and am unclear about some of the laws. What i need to know about are billing and tax laws, like how much am i required to pay in taxes, how i pay taxes, how i can write an invoice and things like that.
I would prefer to have a resource to look up all that stuff but i haven't been successful in finding one. I am german and i do speak german so either german or english would be quite helpful.
1 Answer
In germany you need to differ between "company" and "freelancing". The latter one is a bit more difficult to get, you need a university degree at least. Tax offices in germany are very picky. If you run a company, you need to pay IHK fees and a special tax (gewerbesteuer).
You also should know that not all your services can be invoiced as freelancer. For example web design is billed via your company.
That being said, in case of a company you need to get a Gewerbeschein from your local city. In case of freelancing work only you simply need to tell your tax office. They will send you some forms you have to fill.
Before you start this, you should read about the Gründungszuschuss, a financial help from the government:
http://www.arbeitsagentur.de/nn_26400/Navigation/zentral/Buerger/Hilfen/Existenzgruendung/Existenzgruendung-Nav.html Its a good bunch of money, you should really read about it.
After all, paying taxes is pretty easy. You will need to download Elster, the software for taxes and then pay each months your Mehrwertsteuer. If you have done it one time, you can do it all the time. At the end of the year you make an Einkommenssteuer and thats it.
I would recommend you some good software (Wiso Steuersparbuch) and to show your tax forms to a friended tax expert. Then you are safe.
Writing invoices is pretty easy. You can read some links in the internet about it:
http://www.existxchange.de/recht-und-steuern/checkliste-einwandfreie-rechnungen-schreiben-die-ersten-rechnungen-an-kunden-oder-klienten.html Basically your Umsatzsteuer ID must be there, your full name and contact, the included Mehrwertsteuer and a date.
I am very sorry that I can't give you a link which contains all the information on one page. I could have that aswell back in 1998. Anyway, I hope my little text gives you a good start.
PS: non-german speakers: sorry for the german terms, but I could not translate all in matching english words
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Thank you very much, very good answer. I don't get unemployment right now, and the JobCenter has told me that they will not support me starting up a company, so there will be no zuschuss (and no seminars about taxes and laws which is why i have to ask here). again thank you, it's very helpful. (in case you wouldn't mind helping me further send me an email xyious at gmail.com) – Xyious 13 years ago
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if you plan to do it full time, ask your boss to fire you. Or, if you quit, you can still get the money: after two months of waiting. There are options, always. You can find my email adress at www.grobmeier.de – Christian 13 years ago
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One little correction. You don't need a university degree to work as a freelancer. There is a distinction between "Freier Mitarbeiter" and "Freier Beruf". Everyone can be the former. It just means you are not exclusively integrated in one company. The latter liberates you from the "Gewerbesteuer" but this is only available to very specific professions and can be open to debate (as it is with programmers). – Amenti 13 years ago
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@Amenti: unfortunately there is a difference: a freelancer doesn't need a Gewerbeschein and doesn't need to pay to IHK and Gewerbesteuer to his community. I have not completed a university degree and the tax office was giving me hell to prove that I am having the "same knowledge" and that I am able to work as freelancer. I did that and it cost me a lot of time. I have learned acceptance to become a freelancer depends to the willingnes of your tax office. – Christian 11 years ago
