How to Register Self-Employed Work Correctly

INDEX

• When and Where to Register

• Trade or Freelance – What’s the Difference?

• How to Register a Trade (Gewerbe)

• Registering as a Freelancer

• Completing the “Fragebogen zur steuerlichen Erfassung”

• FAQ

When and Where to Register

If you start working for yourself, you must register your activity as soon as you start your business, but at the latest within one month. Depending on what you do, this happens either at the local tax office (Finanzamt) or at the trade office (Gewerbeamt). You’ll receive a tax number (Steuernummer) for your business once registered.

Since November 2024, new businesses also receive a Business Identification Number (Wirtschafts-ID) from the Federal Central Tax Office (BZSt). It will gradually replace other tax IDs and will become mandatory in tax returns from 2026 onwards.

Trade or Freelance – What’s the Difference?

Self-employed work in Germany is split into two main types:

Freelancers (Freiberufler)

The so-called “liberal professions” (Freie Berufe) are defined in Section 18 (1) of the German Income Tax Act (EStG). They generally require a professional qualification, or creative skill, and independent, personal performance of the work. Freelancers work in fields such as design, education, law, medicine, journalism, or translation.

Other typical liberal professions are: Doctors, dentists, veterinarians, lawyers, notaries, patent attorneys, engineers, architects, auditors, tax advisors, business consultants, physiotherapists, journalists, artists, translators, interpreters, and teachers.

Tradespeople (Gewerbetreibende)

Tradespeople usually sell products, offer services, or run craft or retail businesses. The difference matters because freelancers register only with the tax office, while tradespeople also need to register their business at the Gewerbeamt and may owe trade tax (Gewerbesteuer).

Tax Tip: the annual trade tax exemption is €24,500. Below that, you don’t pay trade tax.

How to Register a Trade (Gewerbe)

If you want to start a trade, contact your local trade office (Gewerbeamt) in the city or municipality where your business is based or where you carry out your activity. In smaller towns, the Rathaus (city hall) or Ordnungsamt (public order office) handles this task. Check your city’s website to find out exactly where to register. Many cities now allow you to register your business online via a digital form. You’ll need to provide your ID or passport, and proof of qualifications (if required).

After registration, you’ll receive a confirmation document – the Gewerbeschein (trade license). The registration fee usually ranges between €20 and €60. Afterwards, you must also complete the tax registration form (Fragebogen zur steuerlichen Erfassung). The trade office automatically notifies:

• the tax office (Finanzamt)
• the Chamber of Industry and Commerce (Industrie- und Handelskammer, short: IHK)
• the Chamber of Crafts (Handwerkskammer) – for manual trades
• the social accident insurance (Berufsgenossenschaft)
• the trade supervision authority (Gewerbeaufsicht)

Tax tip: Unlike freelancers, tradespeople must pay trade tax (Gewerbesteuer). However, there’s an annual exemption limit of €24,500. Only income above this amount is subject to trade tax a and part of it can be offset against your income tax.

How to Register as a Freelancer

If you’re freelance, the tax office (Finanzamt) is the only authority you need to deal with. You must register your activity within one month after starting work by submitting the Fragebogen zur steuerlichen Erfassung online.

In the form, you’ll describe your activity in detail. The tax office will then decide whether your work qualifies as a freelance profession. Once approved, you’ll receive your tax number (Steuernummer) and can start issuing invoices.

Completing the “Fragebogen zur steuerlichen Erfassung”

This form is the most important step in registering your self-employment - whether freelance or commercial. It determines how the tax office will treat you for income, trade, and VAT purposes. You can only complete the form online via ELSTER portal (Germany’s official online tax platform). You’ll need to create a user account, log in, and fill out the digital form.

Depending on your chosen legal form (e.g. sole proprietorship, partnership (GbR), limited liability company (UG/GmbH), or corporation (AG)), you’ll select the corresponding version of the form. Most self-employed people register as sole proprietors (Einzelunternehmen).

Key information you’ll need

• Personal details, tax ID, and previous tax number (if applicable)
• Whether you’ve been self-employed in the past five years
• Business address
• Description of your activity (to classify it as trade or freelance)
• Expected income for the first two years
• VAT registration details (including whether you’ll use the small business scheme – “Kleinunternehmerregelung")
• Details of any employees (if applicable; you’ll also need to notify the Bundesagentur für Arbeit)
• Type of accounting: typically the income-surplus method (EÜR – Einnahmen-Überschuss-Rechnung)

Once you submit the form, the tax office reviews your data and sends you your new tax number. You’ll use this number for:

• Your annual tax return (Steuererklärung)
• Income tax prepayments (Einkommensteuer-Vorauszahlung)
• VAT returns (Umsatzsteuererklärung, if not exempt under the small business rule)
• Trade tax return (Gewerbesteuererklärung, only for trade activities)

FAQ

1. What happens if I register late?

You must register your activity as soon as you start working independently. In practice, many trade offices accept registrations made within 2–4 weeks of starting. Failing to register can be treated as an administrative offence (Ordnungswidrigkeit) and fined up to €1,000. Freelancers must also register within one month of starting. Late registration can lead to fines of up to €5,000. However, in practice, minor delays usually result only in warnings or small fines.

2. Which tax return do I need to file as a self-employed person?

Like employees, you must file an income tax return. You’ll need:

• form EÜR – for income and expenses (Einnahmen-Überschuss-Rechnung)
• form S – for freelance income
• form G – for trade income

Tradespeople also file a trade tax return (Gewerbesteuererklärung). If your trade income stays below €24,500 per year, no trade tax is due. Anyone who does not use the small business scheme (Kleinunternehmerregelung) must also file an annual VAT return (Umsatzsteuererklärung).

If you file your tax return yourself or with the help of tax software, the tax return deadline is always July 31st of the following year.

3. Am I classified as freelance or trade if I’m a “freelancer” in Germany?

In German, the English term freelancer only describes your contract type, not your tax classification. In Germany, “freelancers” can be either trade or freelance for tax purposes.

4. Can I be both freelance and trade at the same time?

Yes. But you must file a separate tax registration form for each activity. You’ll receive a separate tax number for each. If both activities are closely related, the tax office may combine them under one number. However, this can be a disadvantage: your freelance income might then also be treated as commercial, making it subject to trade tax. To avoid that, it’s best to keep them separate — ideally with different bank accounts and accounting.