In Germany, a lot of freelancers can get the status of a Freiberufler, while others are considered as Gewerbetreibende (tradespeople). What are the differences between the two options, and which one has more advantages? And can I choose for myself what I want to be? Many questions arise on this topic when you decide to become a freelancer. We give you an overview.
What is a Freiberufler?
Freiberufler are a subgroup of the self-employed in Germany. Special rules apply to them, for example with regard to taxes, and this status brings some advantages. Whether you are a Freiberufler is decided by the tax office. So you can't decide yourself. The decisive factor is the nature of your services.
§ 18 of the Einkommensteuergesetz (German Income Tax Act) lists a number of professions that are always Freiberufler, including doctors, lawyers, notaries, tax consultants and architects. In addition, scientific, artistic or educational workers are often Freiberufler. They have the relevant training or professional experience that qualifies them.
If you're a self-employed designer or copywriter, you're probably a Freiberufler, and software developers are also often classified that way because they create something and are thus creative. If, on the other hand, you only do administrative work, you are probably considered a tradesperson and must register a business even as a freelancer.
What is a Gewerbetreibender?
All self-employed people who are not classified as Freiberufler are tradesmen. They must register a trade and pay trade tax. There is one important thing to know that applies to corporations, for example a GmbH or UG: they are always commercial enterprises, even if their activities fall within the Freiberufler sector. For example, a text agency with the legal form of a GmbH would be a commercial enterprise, while a freelance copywriter is a Freiberufler.
A mixed activity is also possible if a freelancer not only offers Freiberufler services but also commercial activities. However, they must then clearly separate these, both in accounting and in a separate bank account. If this clear separation is not possible, the entire activity is classified as commercial.
Freelancer and Freiberufler: What is the difference?
The two terms freelancer and Freiberufler are often used interchangeably, but this is not correct. For example, a lawyer or doctor is a Freiberufler, but is not called a freelancer, and on the other hand, there are freelancers who work commercially. A better equivalent for the term freelancer in German would be "freier Mitarbeiter", which means “freelance collaborator”. This is because it only says that it is a non-employee service provider who works for the company as a self-employed person.
However, many freelancers are also Freiberufler - which is probably why the terms are synonymous for many people. Freelancer, however, is a term that has no meaning under tax or corporate law.
Freiberufler have several advantages
For freelancers, there are several advantages to being given Freiberufler status. So you should at least try to be classified that way when starting your freelance business in Germany. The pluses for you are:
- Easier registration: You can register with the tax office, there is no need to register a business.
- No trade tax: You only pay income tax and have to collect sales tax, but trade tax does not apply.
- Simpler profit calculation: For a Freiberufler, an income statement (Einnahmen-Überschuss-Rechnung, EÜR) is sufficient, while traders must prepare a balance sheet if their profit exceeds 60,000 euros.
- Actual taxation: You can select actual taxation for sales tax, i.e. you always pay the sales tax when the customer has paid the invoice. Traders can only select this option under certain conditions.
- No IHK membership required: Tradespeople must become members of the Chamber of Industry and Commerce (Industrie- und Handelskammer, IHK) responsible for them and pay a fee there. This does not apply to a Freiberufler.
So you see: As a Freiberufler, you have it easier in some areas. However, it is important that you take the definition seriously and make sure you actually provide the right services. The classification as a Freiberufler is not for eternity. If your services change, the tax office may consider you a Gewerbetreibender instead, and you will lose the Freiberufler status - with all the consequences.
If you're just starting out as a freelancer, you might want to have a look at our complete checklist that will help you get started.
Freiberufler and Gewerbe: the differences
In this table, we have summarized the most important differences between a Freiberufler and a Gewerbetreibender at a glance:
| Freiberufler | Gewerbetreibender |
| No business registration necessary | Business registration necessary |
| No trade tax obligation | Trade tax liability |
| Simple determination of profit with EÜR | Balance sheet obligatory from 60,000 Euro profit per year |
| No compulsory IHK membership | Compulsory IHK membership |
| Actual taxation possible | Actual taxation not always possible |
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