Essential Guide to German Freelancer Taxes
Learn all about taxes for freelancers in Germany – essential tax IDs for self-employed people, how to get your german freelance tax id and how to file your German freelance tax reports.
German Tax IDs for Freelancers
Learn about the three essential tax IDs for freelancers and sole traders in Germany.
Steuer ID
German Tax ID
Also known as:
- Steueridentifikationsnummer
- Identifikationsnummer
Steuer ID is your unique and permanent German tax identification number.
Every individual is assigned a unique Steuer ID in Germany – even newborn children.
German tax ID comes in a XX XXX XXX XXX format.
German Steuer ID is used for any communication with Finanzamt (German tax authority).
They use your German tax ID to identify you.
If you are employed in Germany, then your employer will need your German Steuer ID to add it to your payslips.
Yes, all foreigners in Germany also get a Steuer ID.
They automatically receive their Steuer ID after registering their address at their responsible Bürgeramt.
It takes about two weeks for Finanzamt to send your German tax ID via post to your registered address in Germany.
If you cannot find or misplaced your German tax ID, you can request it again very easily using this online form.
Steuernummer
German Tax Number
(for freelancer, sole traders and other self-employed people in Germany)
Also known as:
- St. -Nr.
A Steuernummer is your German freelance tax number.
Steuernummer is assigned to self-employed people in Germany. Every self-employed person will have a Steuer-ID AND a Steuernummer.
A German freelance tax number comes in a XX/XXX/XXXXX format.
Steuernummer is your unique freelancer tax number in Germany. It is required for filing German freelancer taxes.
You use it on your invoices, on your business website and for various tax-related purposes.
Without your German freelancer tax number, you may not be able to send invoices, get paid and file taxes in Germany.
Steuer ID is your German tax ID.
- Every resident in Germany receives this number.
- It is similar to a Social Security Number in the USA or Aadhaar in India.
- A German tax ID remains the same throughout your life.
Steuernummer is the German tax number for freelancers and sole traders.
- Only self-employed people in Germany need a Steuernummer.
- A German freelancer tax ID is associated with your local Finanzamt where you registered your self-employment.
- Your Steuernummer will change if you move to a new city or state in Germany.
You get a Steuernummer when you register as a freelancer in Germany.
You register as a freelancer by filling up a form called ‘Fragebogen zur Steuerlichen Erfassung‘.
As of 2021, this can only be done online via ELSTER or through an official online tax filing tool (that is integrated with ELSTER).
GetSorted is one such tool that lets you fill up this form in simple English and directly send it online to your local Finanzamt.
It can take 2-4 weeks to get your German freelancer tax number via post by Finanzamt.
No.
Your Steuernummer is associated with your current Finanzamt.
If you ever change address or move to a different city, you will have to register again with your new responsible tax office in Germany.
Umsatzsteuer-ID
VAT ID
Also known as:
- Umsatzsteuer-Identifikationsnummer
- USt-Identifikationsnummer or
- USt-IdNr
Umsatzsteuer is VAT in German. VAT stands for Value Added Tax.
VAT ID is the unique identification number that you get when you have a VAT obligation as a freelancer in Germany.
A VAT ID is a 9 digit number with the format DEXXXXXXXXX.
You add your German VAT ID to your invoices when you charge VAT from your clients and customers.
You can also use your VAT ID when you want to deduct the VAT from your business expenses.
If your annual income from self-employment is lower than €22.000 in the past financial year (and lower than €50.000 in the current financial year), you will be exempted from VAT obligations.
This is called Kleinunternehmerregelung (small business regulation).
Finanzamt will not send you a VAT ID if you declare yourself as a small business owner (Kleintunternehmer) during your registration process.
You can apply for a VAT ID when you register as a freelancer in Germany.
There is a field in the registration form that asks you if you need a VAT ID.
When you check this option as yes, Finanzamt will send you a VAT ID.
You register as a freelancer by filling up a form called ‘Fragebogen zur Steuerlichen Erfassung‘.
As of 2021, this can only be done online via ELSTER or through an official online tax filing tool (that is integrated with ELSTER).
GetSorted is one such tool that lets you fill up this form in simple English and directly send it online to your local Finanzamt.
German Taxes for Freelancers
Learn about the three essential taxes for every freelancer in Germany.
Umsatzsteuer-Voranmeldung
Advance VAT Report
Also known as:
- UStVA
Umsatzsteuervoranmeldung or UStVA is advance VAT payment made to Finanzamt.
All sole traders and freelancers in Germany who have VAT obligations have to report VAT to Finazamt at regular intervals throughout the year.
VAT reporting for freelancers in Germany depends on the total VAT generated in the past financial year.
- Under 1,000 € VAT: Annual VAT declaration
- Over 1,000 € VAT: Quarterly advance VAT declaration
- Over 7,500 € VAT: Monthly advance VAT declarations
You add all the VAT that you ‘earned’ from your clients or customers. Then deduct all the VAT that you paid on your business expenses.
Depending on the surplus you paid or earned you will either pay Finanzamt or get a refund from them.
In short:
VAT earned from clients – VAT paid on business expenses = VAT to be paid to/ refunded by the Finanzamt.
The deadline for advance VAT payment depends on the frequency of reporting.
Monthly: 10th day of the following month.
For example, the advance return for VAT for January must be submitted by 10 February.
Quarterly: 10th day after the end of the quarter.
For example, April 10 for the first quarter of the year.
Annually: 31st July of the next year (with all your annual tax reports)
You can pay Advance VAT return online via
- ELSTER
- Any online tax filing tool integrated with ELSTER.
Read our head to head comparison of two such English tax filing tools for freelancers in Germany.
With one of these online tools, you can easily prepare and submit your advance VAT payments to Finanzamt.
Einkommensteuer-Vorauszahlungen
Income Tax Prepayments
Also known as:
- Steuervorauszahlungen
- § 37 EStG
Einkommensteuer-Vorauszahlungen are the quarterly tax prepayments that freelancers have to pay to Finanzamt every quarter.
Freelancers pay income tax in quarterly ‘instalments’ and once at the end of the year with an annual income tax return.
The deadlines for income tax payments are as follows.
- 10 March,
- 10 June,
- 10 September,
- 10 December
The amount of the quarterly tax prepayments are determined by the income you earned in the previous year.
This is why Einkommensteuer-Vorauszahlungen amount can vary each year according to your past year’s income.
If you are having financial difficulties in the current year, you can always notify Finanzamt and get your quarterly tax prepayments adjusted.
You do this by filling up a form called ‘Antrag auf Herabsetzung der Vorauszahlungen‘.
This form is also available on ELSTER online portal here.
Most freelancers in Germany set up a SEPA direct debit with their local Finanzamt.
This way Finanzamt can automatically deduct the amount every quarter and the freelancers do not risk missing a tax payment deadline.
Einkommensteuer
Income Tax
Also known as:
- Est.
In Germany, freelancers pay income tax between 14% to 42%.
On top of income tax, there is also a solidarity surcharge of 5.5% and a church tax if you are a member of a church.
Yes. it is called a Grundfreibetrag. This amount is revised every year.
As of 2021, the income tax free threshold in Germany is:
- 9.744 Euro for singles
- 19.488 Euro for married couples/ civil partners
Freelancers pay income tax in quarterly ‘installments’ (explained above) and once with an annual income tax return.
The annual income tax return is due on 31st July (of the next financial year).
So you will file your annual tax return for the entire 2021 on July 31st 2022.
You can do this by setting up a direct debit called SEPA mandate with your responsible Finanzamt.
This is one of the easiest ways since it allows Finanzamt to make an automatic deposit refund or withdraw due tax payment from your business account.
Annual Tax Reports for Freelancers in Germany
Freelancers in Germany must submit three essential annual tax reports. Learn all about them in the following sections.
Umsatz-Steuererklärung
Annual VAT Declaration
Freelancers in Germany have to submit an annual VAT declaration called Umsatzsteuererkärung.
All freelancers in Germany have to submit an annual VAT declaration.
Freelancers registered as Kleinunternehmer are not required to file this tax report.
In an Umsatzsteuererkärung you summarise all VAT ‘earned’ from clients and customers and deduct all your VAT paid on business expenses.
In short:
VAT earned – VAT paid = Amount due for payment or refund
You will submit Umsatzsteuererkärung with your annual tax return.
You can submit Annual VAT Declaration online via
- ELSTER
- Any online tax filing tool integrated with ELSTER.
Read our head to head comparison of two such English tax filing tools for freelancers in Germany.
With one of these online tools, you can easily prepare and submit your advance VAT payments to Finanzamt.
Anlage EÜR
Profit & Loss Statement
Anlage EÜR is a simple profit and loss statement. Freelancers in Germany have to submit this document as a part of annual tax reporting.
Every freelancer and Kleinunternehmer in Germany must submit an Anlage EÜR.
You deduct your annual expenses from your annual earnings. You are either left with profit or loss.
The profit or loss is taken into account for your annual income tax return in Germany.
In short,
Business earnings – Business expenses = Profit or Loss
You can use our German freelancer tax calculator to determine the amount of your Anlage EÜR.
The Anlage EÜR is a part of your income tax return. Therefore, it must be submitted to your responsible tax office by 31 July.
You can submit Anlage EÜR to Finanzamt online via
- ELSTER
- Any online tax filing tool integrated with ELSTER.
Read our head to head comparison of two such English tax filing tools for freelancers in Germany.
With one of these online tools, you can easily prepare and submit your advance VAT payments to Finanzamt.
Einkommen-Steuererklärung
Income Tax Return
Einkommensteuererklärung is your annual Income tax return in German.
Every employed and self-employed individual in Germany has to file an annual income tax return.
All freelancers in Germany and Kleinunternehmer are required to submit an annual income tax return.
Your income tax is calculated based on the profit or loss generated in your Anlage EÜR.
Then you report several personal expenses such as health insurance, private liability or disability insurance, child care costs. You also report any income from additional sources such as investments, dividends or rent.
All this is considered to calculate the final amount of your income tax by Finanzamt.
You can also use our German freelancer tax calculator to determine your estimated income tax.
Your income tax return must be submitted to your responsible tax office by 31 July.
Freelancers in Germany can file their annual income tax returns online using
- ELSTER
- Any online tax filing tool integrated with ELSTER.
Read our head to head comparison of two such English tax filing tools for freelancers in Germany.
With one of these online tools, you can easily prepare and submit your advance VAT payments to Finanzamt.
Use our free of cost
German Freelancer Tax Calculator