Germany is an easy country in which to be self-employed on paper and a demanding one in practice. The rules are clear, the portals are online, and the registration fees are low. What catches people out is the order: the type of activity decides who you register with, which taxes you pay and which insurance you need. This guide to freelance in Germany gives you the sequence.
Freiberufler or Gewerbetreibender: which are you?
German law makes a distinction that decides everything. A Freiberufler (liberal professional) practises one of the activities in § 18 of the Income Tax Act: scientific, artistic, writing, teaching and educational work, and a list of professions such as doctors, lawyers, engineers, architects, accountants, business consultants, journalists, interpreters and translators, plus similar occupations. Everything else, such as trade, crafts and commercial services, is a Gewerbe.
The consequences: a Freiberufler registers only with the tax office. A Gewerbetreibender also registers the activity with the municipality (Gewerbeanmeldung, § 14 GewO) at the moment of starting, and pays trade tax (Gewerbesteuer) above €24,500 of profit. If the tax office reclassifies you from Freiberufler to Gewerbe, you owe the trade tax and the registration, so the grey zone of "similar" professions needs care. In case of doubt, the tax office decides.
How do you register to freelance in Germany?
- Decide your category.
- For a Gewerbe, register with the municipality (Gewerbeamt or Ordnungsamt). Many do it online. In Berlin, for instance, the fee is €26 for an individual and €15 online, and an ID is enough for an EU citizen. The municipality tells the tax office, the chamber of commerce or crafts and the accident insurer. Some trades need extra authorisation or registration in the crafts register; the municipality tells you if yours is one of them.
- Everyone: send the tax questionnaire within one month of starting (§ 138 AO). It goes online through ELSTER in principle; the tax office can accept paper on request in cases of hardship. You estimate turnover and profit and choose whether to use the small-business scheme.
- Wait for the Steuernummer, sent by post. It goes on your invoices. Your personal Steuer-ID is a different number.
- Issue compliant invoices with your Steuernummer or VAT number, and the small-business mention if it applies.
Your residence and registration papers matter here: see the Anmeldung. EU, EEA and Swiss citizens have freedom of establishment, so no residence title is needed. A British citizen needs a residence title that permits self-employment, issued by the foreigners' office, before the Gewerbeanmeldung.
If you are on the line between Freiberufler and Gewerbe, or you work for clients in several countries, the classification affects tax, registration and insurance. Moovy, our AI assistant, can explain the criteria in plain English and list the questions to put to your tax office or adviser. It does not register you or decide your category.
How does VAT work for a small business?
Under the Kleinunternehmer scheme (§ 19 UStG), you charge no VAT if your turnover was no more than €25,000 in the previous year and does not exceed €100,000 in the current year. You also cannot recover VAT on purchases. If you cross €100,000 during the year, the scheme ends at once: the sale that takes you over is already subject to VAT. In the year you start, the threshold is €25,000. You can opt out of the scheme to recover VAT, but that binds you for at least five calendar years.
Under the normal scheme, you charge VAT and file advance returns (Umsatzsteuer-Voranmeldung) on ELSTER: in principle quarterly, monthly if your previous year's VAT exceeded €9,000, and the tax office can exempt you if it did not exceed €2,000. They are due, with the payment, on the 10th of the month after the period. The old rule that start-ups file monthly in their first two years is suspended for 2021 to 2026; the law in force does not extend this beyond 2026, so a business started in 2027 should expect monthly returns in its first two years unless the law changes.
For services to a business in another EU country, the customer usually pays the VAT in their own country (reverse charge). You then need an EU VAT number (USt-IdNr.) from the Federal Central Tax Office, and the invoice carries both VAT numbers and the reverse-charge mention; a Kleinunternehmer is exempt from showing these numbers.
What accounting and taxes follow?
Most freelancers keep a simple profit statement (Einnahmen-Überschuss-Rechnung). A trader must switch to full accounts above €800,000 of turnover or €80,000 of profit a year, from the financial year after the tax office notifies them, or if entered as a merchant in the commercial register (§ 141 AO); these thresholds do not apply to Freiberufler. Each year you file income tax with your profit statement, the annual VAT return and, for a Gewerbe, a trade-tax return. For the income tax scale, see taxes in Germany for new residents.
The trade tax works like this: profit, less an allowance of €24,500 for a sole trader, times 3.5%, times the municipality's multiplier (Hebesatz, at least 280%). A large part is then credited against your income tax, up to four times the base amount (§ 35 EStG). Freiberufler do not pay it.
What insurance do you need?
- Health. Compulsory. In the statutory system you pay the full 14.6% (14.0% without sick pay) plus your fund's additional rate (2.9% on average in 2026), on at least €1,318.33 of monthly income in 2026, which comes to about €223 a month at the reduced rate. Voluntary entry to the statutory system is only open in certain cases, mostly after prior statutory insurance (12 months just before, or 24 months in five years) and with notice to the fund within three months. Private insurers set their own prices by age and health. See health insurance in Germany for expats.
- Long-term care. Compulsory, linked to health insurance, paid in full by you: 3.6% in 2026, 4.2% if you are 23 or older and have no children, with 0.25 points less for each child under 25 from the second to the fifth.
- Pension. Compulsory for certain groups (§ 2 SGB VI): teachers and carers without employees subject to contributions, midwives, craftsmen on the crafts register, artists and publicists, and self-employed people who work mainly for one client, among others. The standard 2026 contribution is €735.63 a month at 18.6%; with proof of a lower or higher income, the contribution follows it, up to a ceiling. In the year you start and the three following calendar years, the contribution is calculated on half the standard base unless you ask for the full one.
- Artists and writers. Through the Künstlersozialkasse, insured artists and publicists pay half of their health, care and pension contributions; the other half comes from a federal subsidy and a levy on the businesses that use their work.
- Accident. The Berufsgenossenschaft covers certain self-employed people automatically and others on request.
When do you need a company?
For limited liability, the usual forms are the GmbH (€25,000 capital, at least €12,500 paid before registration) and the UG (haftungsbeschränkt) (from €1, fully paid in, with a quarter of each year's profit set aside as a reserve). Statutes are signed before a notary, the company exists only once entered in the commercial register (€225 court fee for a standard registration), and corporation tax is 15% plus the solidarity surcharge, falling gradually from 2028 to 10% from 2032 under the current law. The company also pays trade tax, without the €24,500 allowance. Anyone who acts for the company before registration is personally liable.
How much does it cost to start a freelance activity in Germany?
Registration with the tax office is free. The municipality's Gewerbeanmeldung costs a fee set locally. Membership of the chamber of commerce (IHK) follows the trade registration, with no contribution if your profit does not exceed €5,200 and you are not in the commercial register, and start-up exemptions under conditions while profit stays up to €25,000. A tax adviser (Steuerberater) is optional and charges freely set fees.
What if you already work as a freelancer in another country?
If you live and work in Germany, your activity is in principle declared and taxed here. Check how to close or transfer the activity in your home country, otherwise you may keep paying contributions there. If you work for clients in several countries, social-security coordination points to one country, normally your country of residence if you do a substantial part of your work there (at least 25% of your time or income), and a temporary posting can keep you affiliated at home with the A1 certificate, for 24 months, extendable by agreement between the two countries. The tax side follows the treaty between the countries.
Which mistakes should you avoid?
- Calling yourself a Freiberufler by default.
- Crossing €100,000 mid-year without noticing.
- Billing an EU business client as if it were German.
- Forgetting the tax questionnaire. No questionnaire means no Steuernummer and no valid invoices.
- Underestimating the health insurance minimum.
Before you choose your status, your VAT scheme or a company form, have your situation confirmed by a tax adviser (Steuerberater) in Germany; for insurance, ask the health fund and the Deutsche Rentenversicherung directly.