Wanna run a small freelance business and live in Germany or other EU* countries? Do it in 8 steps
So you’d like to work as IT Freelancer part time or full time, right?
I assume that your German is very limited. This is not a problem at all. In Germany they want you to earn money and pay taxes – that’s it. Sure, your activities should not violate legal standards. Everything that has to be done in German, like filling out the documents, sending balance sheets etc. can be delegated at a very reasonable price.
We’ll start with the simplest things, and slowly we’ll move on to something more complex, okay?
First, look at the following two options.
This article is only about the Germany option.
There are two conditions for your freelance freelance business:
a) Permit for self-employment (e.g. Selbständige Tätigkeit gestattet)
b) German bank account**
1: Write down your business concept.
2: Inform your current employer and the Immigration Office (Ausländerbehörde)***. This doesn’t apply to EU citizens.
3: Inform your health insurance.
4: Download the Fragebogen zur steuerlichen Erfassung, fill it out, sign it, send it to the tax office and wait for confirmation.
5: As soon as the confirmation is received, you may immediately make profits and issue invoices.
6: As soon as you have issued the first invoice and received the customer’s payment, it is your duty to inform the tax office – in the form of monthly advance tax return and advance tax payment.
7: Once a month send advance tax returns and advance tax payments.
8: In January until the end of April at the latest you prepare an annual report. Then you sign it and send it to the tax office (Finanzamt). The tax office will contact you and tell you how much tax you still have to pay. Since you have already made tax prepayments in the first year, it is quite possible that you will get some of your money back from the tax office.
9: At the end of each quarter you send advance tax returns and advance tax payments.
Steps 8 and 9 will be repeated during the next few years. That’s it!
Tip: If you are subject to regular taxation, put 40% of your gross income in a sub-account. (As a small trader (Kleinunternehmer) 10% is enough to put aside)
If you have questions, visit my FAQ-Page about IT-Freelance in Germany.
* – as soon as you have registered the Freelance (as a small business) in Germany, you can live as long as you wish in any EU country. Your customers can be not only from Germany, but also from every country of the world.
** – A bank account in an EU country (Poland, Lithuania etc.) is sufficient. But the account in a German bank looks more solid and brings you more clients.
*** – Translations and explanations of German technical terms and abbreviations You will find in the GLOSSARY
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