The easiest way to register as a freelancer in Germany: filling in the Fragebogen zur steuerlichen Erfassung

Want to become self-employed in Germany? You’re in the right place! 

This guide will walk you through the form you need to complete when you register as a freelancer or a sole trader with the German tax office (Finanzamt). Qonto has simplified the form you need to submit (the Fragebogen zur steuerlichen Erfassung), allowing you to complete (almost) all of it in English, and for free. You can access the simplified form by clicking this link, and then simply follow the step-by-step instructions below.

Once we’ve verified your email address and you’re signed in, select Germany as the country where your business is based, then click the box ‘You want to create your business’, then ‘Einzelunternehmer or Freiberufler’ (sole trader or freelancer).

You’ll need to come equipped with:

• your personal tax number (Steuer-ID), and
• a rough idea of how much revenue you expect to make.

Once you’re inside the form, you’ll see it’s split into 6 sections, accessible via tabs. On the right, you’ll find an overview of the instructions for that section. For detailed explanations of each question, hover over or click the question mark icon beside each field.

Let’s get started in the first tab, which is all about you!

Fill in your name, date of birth, address and your personal tax number (Steuer-ID), exactly as they appear on your official documents.

If you’re an officially registered member of a church, you need to add that in the religious affiliation dropdown menu, so the Finanzamt can add your church tax. If you don’t officially belong to a church, select ‘Not subject to church tax’.

If you’re married, you’ll need to enter your spouse’s personal details too; this might influence which tax category you fall into.

Enter your contact information and state whether or not you’ve moved from another German city in the past 12 months. If you have, enter your previous address there.

When you’ve filled in all the mandatory fields, click ‘Next’ to move onto the 2nd section.

Here, you’ll need to describe your business activity in German. If you don’t speak or write German very well, you can use AI or other free online tool to translate from English or another language. You can also ask any native German speakers in your network to help you or check your description. You can write just a few lines to describe the services or products you’ll provide, your main income sources, and your target customers. The Finanzamt will use this description to decide whether you qualify as a Freelancer (Freiberufler) or a sole trader (Gewerbetreibende). You can learn more about that distinction in a separate article.

Enter a business postal address and/or email if you have them.

If you’ve previously registered a business activity in Germany in the last five years, you’ll need to fill in some basic information about that activity here, including a brief description (again, this must be in German) and the business tax number (Steuernummer) - be careful not to confuse this with your personal tax number (Steuer ID).

The 3rd section asks you about tax and accounting. You’ll need to estimate your revenue for the current year and the following year. Based on these estimates, the Qonto form will automatically calculate for you the projected annual revenue for the year. So, if you start the company in July, and estimate you’ll earn €10,000 between July and the end of the year, a box will appear to tell you your estimated annual revenue - in this case €20,000.

This annual revenue estimate determines whether you qualify for Kleinunternehmer, or small business, tax rules. If the annual figure is below €25,000, you can be a Kleinunternehmer, which means you can opt out of charging VAT to your customers. You can make that choice further down this section (Charging VAT as a Kleinunternehmer).

If your projected annual revenue for the current year is more than €25,000, you can’t qualify as a Kleinunternehmer. In that case, you will have to charge VAT and the question about charging VAT won’t even appear.

If you (or your spouse) have previously been given a business tax number, and if you’ve used it to file a tax return in the last three years, you will need to enter that number, as well as the relevant local tax office, in the Tax number (Steuernummer) question. 

If you are going to charge VAT, or if you have customers outside Germany, you should request a VAT number.

As a Kleinunternehmer, you can choose whether or not to charge VAT to your customers. There are pros and cons of doing this.

The benefits of charging VAT include:

• You can claim back the VAT you spend on business-related expenses; this is especially useful if you have high costs. 
• Customers of yours who are businesses (not private consumers) can claim back the VAT on your invoices; this usually means larger companies prefer VAT-registered suppliers. 
• VAT-registered are often perceived as ‘more professional’.

The drawbacks of charging VAT include: 

• Your prices will be 19% higher (that’s currently the standard VAT rate), making them less attractive to private consumers (customers who are not businesses). 
• It requires extra paperwork, such as regular VAT returns. 
• Mistakes reporting your VAT can lead to audits and potential penalties.

You’ll also have to choose your bookkeeping method. If you’re a Freelancer, or a sole trader earning less than €80,000 a year, you can choose simplified single-entry bookkeeping to make your admin burden much lighter.

If you’re a sole trader earning more than €80,000 (or if you simply love more complex bookkeeping) you’ll need to select Double-entry bookkeeping, which is more time consuming and requires you to keep more financial records, such as a balance sheet.

There are further questions that will only appear if you don’t qualify as Kleinunternehmer.

In the Taxation basis question, you’ll be asked whether you intend to apply cash accounting or accrual accounting.

Cash accounting means you record your income or outgoings when the money enters or leaves your account. This is generally considered to be simple and easier for tracking cash flow.

With accrual accounting, you record everything when you send or receive invoices, so before any money changes hands. This provides a more complete overview of business performance and profitability, and is often required by lenders and investors.

Then, there’s a question on VAT exemption; so find out if your activity makes you exempt from VAT (for instance some education, healthcare and financial services). To do that, you should consult Section 4 of the German VAT Act (§4 UStG, link in German). If it does apply to you, enter a short description of the activity in German and enter the relevant paragraph number from Section 4 of the VAT Act.

Similarly, some professions qualify for a reduced VAT rate of 7% instead of 19% (for example selling groceries, cultural tickets, hotel accommodation); to find out if you’re in that category, check out Section 12 of the German VAT Act (§12 UStG, link in German). If it does apply, you must enter a short description of the activity in German and enter the relevant paragraph number from Section 12 of the VAT Act.

The most common self-employed professions don’t typically qualify for VAT exemptions and reductions, but it is worth checking the criteria in the VAT Act, or seeking advice from a tax advisor. If either case does apply to you, you will need to include a mention of the exemption/reduction on each invoice you send.

Whereas the previous section asked you about your expected revenue, the Estimations tab asks you to forecast your profit. To do that, take the revenue you projected in the Tax tab and deduct from it expenses for anything you think you’ll need to buy to support your business (things like raw materials, a computer, software, online subscriptions, training, pens and paper, transport costs etc.).

• If you expect to make a profit from freelancing, enter your estimated profit for the current year and for next year.
• Do the same if you expect to make a profit from trade, meaning as a sole trader (Gewerbetreibende) rather than a freelancer (Freiberufler).
• And, if you remain employed whilst carrying out your self-employment on the side, enter your expected salary as an employee for this year and next.
• Estimate how much VAT you think you’ll pay in the first year of business; to calculate this, you can work on the basis that VAT accounts for 19% of your business costs.

You then need to declare any other sources of income and any tax deductions you’re entitled to. So if you enter, ‘yes’, you expect to get income from investments from any of the following sources, you’ll need to say how much for the current year and the following year.

• Expected gross annual, pre-tax profit from investments (stocks and shares, dividends, interest etc.).
• Expected gross annual, pre-tax profit from the rental or leasing of any assets you own (apartment, equipment, vehicles etc.).
• Expected gross annual, pre-tax profit from agriculture and forestry (animal breeding, growing and selling crops, timber farming etc.)
• Expected income from other sources (pension, royalties etc.).

As well as these sources of extra income, you should also enter any costs that can be deducted from your taxable income to reduce your tax bill:

• Expected amount of ‘private special expenses’ (Sonderausgaben) - these are non-business related expenses such as private health/pension/life insurance plans, church tax, charity donations, alimony or higher education costs for your children if you have any. See here for more information. Bear in mind that you may have to provide proof of these costs to the Finanzamt further down the line.
• Expected tax deductions (Steuerabzugsbeträge) - these are contributions you make to things like wage tax, solidarity tax, and church tax. To answer this question, check your last income tax return and enter the amount of Steuerabzugsbeträge you find there. If you’re unsure, you can always leave this field blank.

Next, we come to the Business account tab. The tax office needs this to collect or refund taxes. You might already have a business account, in which case you can enter its IBAN and confirm who the official account holder is.

In any case, once you’ve submitted this form, you’ll open a Qonto account and get a free trial to see all the things it can do, like invoicing and bookkeeping shortcuts. In that case you can wait to get your Qonto IBAN and then submit it to the tax office later.

The last step of the process is to review your application and submit it to the Finanzamt. Select the local tax office you’re submitting it to (use the link provided in the form to find your local office). Click Preview and submit, then check all the information is accurate before sending it off. The Finanzamt will get back to you within 4 to 8 weeks with a response, a business tax ID and any further instructions.