Freelancing in Germany

EU Blue Card holders

You can do limited freelance work on the side, but your primary income must remain from qualified employment. To freelance full-time, you must switch to a Freiberufler-Aufenthaltserlaubnis (§21 AufenthG). Speak to the Ausländerbehörde before reducing employed hours.

Niederlassungserlaubnis (Settlement Permit / PR) holders

No restriction on self-employment. You can freelance freely without any additional permit or approval. This is the most flexible status for freelancers.

Skilled Worker Visa holders

Your visa is typically tied to employed work with a specific employer. Check your permit — many skilled worker visas do not permit self-employment. If your permit text says 'Beschäftigung gestattet' only, freelancing may not be allowed without switching permits.

Freiberufler-Aufenthaltserlaubnis (§21 AufenthG)

The dedicated permit for self-employed professionals. To obtain it, you must demonstrate sustainable income prospects, existing client relationships or contracts, relevant qualifications, and, for certain professions — proof of demand for your services in the region. This permit is granted at the discretion of the Ausländerbehörde.

Step 1 — Fill in the "Fragebogen zur steuerlichen Erfassung"

The questionnaire for tax registration. Available on ELSTER (elster.de) or as a paper form from your local Finanzamt. It covers your personal details, type of activity, expected income, and VAT intentions.

Step 2, Declare your type of activity

In the activity field, write "Freiberufler" and describe your specific profession (e.g., "selbständiger IT-Berater / Software-Entwickler"). The Finanzamt uses this to confirm your Freiberufler status.

Step 3 — Estimate your first-year income

You must provide an estimated revenue for the current and upcoming year. Be realistic, this affects whether the Finanzamt asks for quarterly advance tax payments (Vorauszahlungen) from the start.

Step 4 — Receive your Steuernummer

The Finanzamt issues a Steuernummer (e.g., 123/456/78901) by post within 2–6 weeks. This is different from your personal Tax-ID (Steueridentifikationsnummer) issued when you registered your address (Anmeldung).

Step 5, Start invoicing immediately

You can issue invoices before receiving your Steuernummer. Simply add the note: "Steuernummer beantragt" (tax number applied for) where the number would normally appear. Clients will accept this.

Option 1 — Kleinunternehmerregelung (§19 UStG)

Eligibility: Revenue under €22,000 in year 1 AND expected under €50,000 in year 2. Benefit: No VAT charged on invoices. No VAT returns to file. Far simpler administration. Downside: You cannot reclaim input VAT on business purchases (e.g., software, hardware, office costs). Invoice note required: "Gemäß §19 UStG wird keine Umsatzsteuer berechnet."

Option 2, Regelbesteuerung (Standard VAT)

Rates: 19% VAT on most services (7% on some specific categories). Obligation: File monthly or quarterly VAT returns (Umsatzsteuervoranmeldung) via ELSTER. Benefit: You can reclaim input VAT on business expenses — valuable if you have high overheads. Best for: Freelancers with significant business purchases or large B2B clients (who reclaim VAT anyway).

Option 1 — Statutory Insurance (GKV) Voluntary Membership

Providers: Techniker Krankenkasse (TK), AOK, Barmer, DAK, and others. Cost: Approximately €220–450/month depending on your income. Minimum contribution: Even if you earn very little, GKV charges based on a minimum assessed income of €1,131.67/month, so the floor is roughly €200–230/month. Benefits: Covers you and (if applicable) your family. No age-based premium increases. Easier to switch back from private insurance.

Option 2 — Private Insurance (PKV)

Cost: Can be cheaper when you are young and healthy, typically €150–300/month for a healthy 30-year-old. Benefits: Often faster appointments, private hospital rooms, more comprehensive coverage. Downsides: Premiums increase significantly with age and health conditions. Family members are NOT covered — each person pays separately. Switching back to GKV is very difficult once you are in PKV. Best for: Young, healthy, single freelancers who plan to leave Germany before retirement age.

Your full legal name and registered address

Must match the name and address on file with the Finanzamt.

Client's full legal name and address

The recipient's legal details, not just a trading name.

Invoice date (Rechnungsdatum)

The date the invoice is issued.

Sequential invoice number (Rechnungsnummer)

Must be unique and sequential, no gaps allowed.

Your Steuernummer (or USt-IdNr. if VAT-registered)

Required on every invoice. If still waiting, write "Steuernummer beantragt".

Detailed description of services rendered

Be specific — "IT consulting" is not enough; describe the project or deliverable.

Service period or delivery date

When the service was performed, not just when invoiced.

Net amount (Nettobetrag)

The amount before any VAT.

VAT rate and amount, OR Kleinunternehmer note (§19 UStG)

Either charge VAT explicitly or include the statutory exemption note.

Gross total amount

Net + VAT (or just net if Kleinunternehmer).

Your bank account IBAN and BIC

Required for payment. German IBAN strongly preferred.

Payment terms (e.g., "Zahlbar innerhalb von 14 Tagen")

Specify when payment is due.

Einkommensteuer

All freelancers pay income tax on profit (revenue minus allowable expenses). Filed annually via Steuererklärung. Progressive rate 0–45%.

Vorauszahlungen

All freelancers (from year 2) pay quarterly advance tax payments the Finanzamt requests based on your prior year profit. Due: Mar 10, Jun 10, Sep 10, Dec 10.

Gewerbesteuer

Gewerbetreibende only. Trade tax on profits above €24,500. NOT applicable to Freiberufler, one of the main advantages of Freiberufler status.

Umsatzsteuer (VAT)

Regelbesteuerung only. Charged on invoices (usually 19%), filed monthly or quarterly. Kleinunternehmer are exempt.

Solidaritätszuschlag

High earners only. Solidarity surcharge — effectively abolished for most people since 2021. Only applies above ~€69,000 individual income (2026).

Kirchensteuer

Registered church members only. 8–9% surcharge on income tax. Opt out by officially leaving your church (Kirchenaustritt) at the local Standesamt.