Business & Taxes

Navigating the Finanzamt is tough. Here is how to freelance or start a GmbH correctly.

1. How you can earn money

👷 Employee

Angestellter

Standard employment contract. Your employer pays half of your health insurance and pension. Your taxes are deducted automatically from your salary.

💻 Freelancer

Freiberufler

For explicit "liberal professions" like Engineers, Doctors, Architects, and Writers. You pay NO trade tax (Gewerbesteuer). Easier accounting.

🏪 Tradesperson

Gewerbetreibender

For selling physical goods, consulting (usually), or crafts. You must register a trade (Gewerbe) and pay local trade tax if profit > €24.5k.

2. Taxes Explained

Income Tax

Einkommensteuer

Progressive rate (14% - 45%). The first ~€11k you earn is tax-free (Grundfreibetrag).

VAT

Umsatzsteuer

19% standard (7% for food/books). If you earn under €22k/year, you can be VAT-exempt (Check "Kleinunternehmerregelung").

Church Tax

Kirchensteuer

8-9% surcharge on income tax. You can opt out at the Bürgeramt (Kirchenaustritt).

3. Tools to Survive

Business Bank Accounts

Don't mix personal and business money. The Finanzamt hates it.

FinomQontoN26 Business

Tax Software

Unless you love paper forms, use an app to submit your VAT returns.

AccountableSoristElster