How are freelancers classified as Freiberufler or Gewerbetreibende in Germany?

Section 18 EStG covers independently exercised scientific, artistic, literary, teaching and educational activities. It also identifies a range of catalogue professions, including:

• doctors, dentists and veterinarians;

• lawyers, notaries and patent attorneys;

• engineers, architects and surveyors;

• auditors, tax advisers and consulting economists;

• journalists and photojournalists;

• interpreters and translators; and

• certain comparable professions.

A profession not expressly listed may qualify as a similar profession where the person’s training, professional knowledge and activity are sufficiently comparable to a recognised catalogue profession.

A Freiberufler may use professionally trained staff, provided the professional continues to act in a leading and personally responsible capacity based on their own expertise.

The competent tax office determines whether the activity falls under § 18 EStG. The parties cannot create Freiberufler status merely by using that description in an agreement.

Under § 15 EStG, a commercial activity generally involves:

• independent activity;

• sustained or repeated activity;

• an intention to make a profit; and

• participation in general economic activity.

The activity must not already constitute agriculture, forestry, a liberal profession or another category of independent work.

Commercial activities may include retail, production, brokerage, agency services and many digital or operational services that do not meet the requirements of § 18 EStG.

Under § 14 GewO, commencement of a standing trade must generally be notified to the competent trade authority. Notification may also be required when the business relocates, materially changes or closes.

Depending on the activity, membership of the relevant Chamber of Industry and Commerce or Chamber of Crafts may follow. Regulated activities may require additional licences or professional authorisation.

A person beginning an independent professional, agricultural or commercial activity must provide the competent tax office with the required tax-registration information under § 138 AO. This is normally completed electronically through the official ELSTER system.

A Freiberufler generally:

• registers with the tax office;

• receives or uses the relevant tax number;

• declares income from self-employed professional activity;

• pays income tax on taxable profit; and

• accounts for VAT unless an exemption or the small-business regime applies.

A Gewerbetreibender generally:

• submits a trade notification to the local authority;

• completes tax registration;

• declares commercial income;

• may become liable for trade tax; and

• may acquire chamber-related obligations.

Both categories must maintain adequate accounting and tax records. The applicable bookkeeping method depends on the legal form, size and statutory accounting requirements.

Where a person performs both liberal-professional and commercial activities, the activities should be assessed carefully and, where possible, documented and accounted for separately. Mixed activities, especially within a partnership, may create complex tax consequences.

No. A person may be registered as a Freiberufler or Gewerbetreibender and still be classified as an employee in relation to a particular Client.

The tax office assesses the nature of the person’s income and business activity. Employment and social-security authorities assess how the individual Assignment operates.

Classification risk may remain where the Vendor:

• works under detailed Client instructions;

• is integrated into the Client’s organisation;

• performs continuing employee-like duties;

• has little control over working time or method;

• bears no meaningful commercial risk; or

• depends organisationally on the Client.

Conversely, a genuine independent Vendor may operate either as a Freiberufler or as a Gewerbetreibender. The tax distinction does not create a hierarchy of independence.