Registering as a freelancer or sole trader in Germany

Within a month of starting work for yourself, you send your tax office (Finanzamt) a questionnaire for tax registration, the Fragebogen zur steuerlichen Erfassung, online through ELSTER. Nobody sends it to you: you file it unprompted, and the Finanzamt replies by post with your tax number (Steuernummer). If your work is a trade (Gewerbe) rather than a liberal profession, you also register with the local trade office, for a fee in the tens of euros. Three answers in the questionnaire shape your first years: your expected profit, the small-business VAT exemption, and whether you need an EU VAT ID.

1. Who has to register, and by when

The duty is in the Fiscal Code. Anyone who takes up freelance work tells the Finanzamt; anyone who opens a commercial business tells the municipality, which passes it on (§ 138(1) AO). Then comes the questionnaire, with the facts the Finanzamt needs to tax you. It goes in electronically, within one month of starting (§ 138(1b) and (4) AO).

Since 1 January 2021 the Finanzamt no longer sends the form out; filing it is up to you. The same applies to a side business next to a job.

The questionnaire asks when the activity began, including preparation (Vorbereitungshandlungen). That date can be earlier than your first invoice.

Which Finanzamt: the one for the place the business is run from. For most freelancers working from home, that is the Finanzamt for their home address. ELSTER asks you to pick it.

2. Freelancer or trade: the Gewerbeanmeldung

German tax law splits self-employment in two. The liberal professions (freie Berufe) are scientific, artistic, writing, teaching and educational work, the listed professions such as doctors, lawyers, engineers, architects, journalists, translators and interpreters, and "similar professions" (§ 18(1) no. 1 EStG). Most other businesses are a trade (Gewerbe, § 15 EStG).

Freelancers deal with the Finanzamt only. A trade is also registered with the trade office (Gewerbeamt; in Berlin, the district Ordnungsamt) where the business is, at the moment it starts (§ 14(1) GewO). Many cities, Berlin among them, take it online. Each city sets its own fee: Berlin charges €26 in person and €15 online, Hamburg €20.

The trade office forwards your registration to the Finanzamt, the chamber of commerce or of crafts, and other bodies. That does not replace the questionnaire: the Finanzamt still expects it from you within the month.

The difference goes beyond paperwork. A trade:

• pays trade tax (Gewerbesteuer) on profit above an allowance of €24,500 a year for individuals (§ 11(1) GewStG), see our trade tax guide;
• brings membership of the local chamber of commerce, the IHK (§ 2 IHKG), or of the chamber of crafts for a craft business;
• sometimes needs a permit before it starts, depending on the trade.

Where the line runs for consultants, IT work and online businesses is a frequent argument. Our guide to freelancer or trade goes through it.

3. Getting into ELSTER

The questionnaire is filed through ELSTER, the tax administration's online portal. Registering is free, but part of it can come by post, so start a little before you need it. There are two routes.

• With your tax ID (Steuer-ID). If you are registered at an address in Germany, you have one. ELSTER suggests the account type "for a private person" for sole traders and freelancers without employees. An activation ID comes by email and an activation code by post, to your registered address. The letter takes some days; the Hamburg chamber of commerce reckons on about two weeks for the whole registration.
• Without one. If you have neither a Steuer-ID nor a Steuernummer yet, ELSTER offers registration with an email address only. Both activation codes come by email, so there is no letter to wait for, but the account can do one thing: send the questionnaire. Once your tax number arrives, you upgrade it to a full account, which does mean a letter.

You will need a full account anyway: VAT returns, the annual income tax return and the profit statement (Anlage EÜR) all have to be filed electronically.

The form is called "Fragebogen zur steuerlichen Erfassung für Einzelunternehmen", under Formulare & Leistungen → Alle Formulare. ELSTER's pages can be machine-translated into English, but the tax forms themselves are excluded and stay in German. Partnerships and companies use their own versions; for a UG or GmbH, see UG or GmbH.

4. What the questionnaire asks

It runs to several pages, and most of it is plain fact:

• You: name, address, date of birth, Steuer-ID, religion (for church tax), marital status, and your spouse's or registered partner's details;
• bank account for refunds, and whether you want to pay by direct debit;
• a tax advisor, if you have one and want the Finanzamt to write to them;
• where you were before: your previous address if you moved in the last twelve months, and any tax number you had in the last three years;
• the business: name, address, an exact description of what you do, the start date, other premises, a commercial register entry if there is one;
• expected income for the year you start and the next, from the business and from everything else (a job, rent, investments);
• how profit will be worked out: income minus expenses (Einnahmenüberschussrechnung), or full accounts;
• employees, if you will have any, for payroll tax;
• VAT: expected turnover for this year and next, the small-business exemption, reduced rates or exempt sales, when VAT falls due, and an EU VAT ID.

Have your Steuer-ID, IBAN, start date and an estimate of turnover and profit at hand. Three of the answers are decisions rather than facts, and they are the next three sections.

5. Choice one: expected profit and prepayments

Until there is a tax assessment to go on, the Finanzamt uses your estimate of profit to set income tax prepayments (Vorauszahlungen). They fall due on 10 March, 10 June, 10 September and 10 December, and are set only if they come to at least €400 a year and €100 per instalment (§ 37 EStG). A trade adds trade tax prepayments on 15 February, 15 May, 15 August and 15 November (§ 19 GewStG).

The estimate cuts both ways. Too low, and the first assessment can bring a back payment for that year together with higher prepayments from then on. Too high, and money the business may need sits with the Finanzamt. The Finanzamt can adjust prepayments when the figures change (§ 37(3) EStG); our guide to tax prepayments explains how that works.

6. Choice two: the small-business exemption or regular VAT

Since 1 January 2025, a business is exempt from VAT as a small business (Kleinunternehmer) if its turnover was no more than €25,000 the year before and stays at or under €100,000 in the current year (§ 19(1) UStG). Turnover is counted net, on money actually received. In the year you start there is no year before, and the Finanzamt applies the €25,000 limit to that first year's turnover; crossing it ends the exemption from that point.

Taking the exemption means:

• no VAT on your invoices, which instead say the small-business exemption applies;
• no VAT reclaimed on what you buy for the business (Vorsteuerabzug);
• no VAT returns, with two exceptions: the Finanzamt asks for one, or you owe VAT on a purchase from abroad under the reverse charge, which is then reported for that period (§ 18(4a) UStG).

You can choose regular VAT instead. That choice binds you for at least five calendar years (§ 19(3) UStG). How the two compare depends on who your clients are and what you spend; our Kleinunternehmer guide goes through it.

With regular VAT, you file an advance return (Umsatzsteuer-Voranmeldung) by the 10th day after each period (§ 18 UStG). For a business started in 2026, the VAT you expect for the year sets the period: monthly above €9,000, otherwise quarterly. That rule is temporary, written for 2021 to 2026. As the law stands on 22 October 2026, a business started in 2027 files monthly in its first and second calendar year. More in our guide to VAT returns.

The VAT section also asks when VAT falls due: when you invoice (Sollversteuerung, the default) or when the client pays (Istversteuerung). The second needs the Finanzamt's permission, which it can give up to €800,000 of turnover in the previous year, and for the turnover of liberal professions (§ 20 UStG). You apply for it in the questionnaire.

7. Choice three: an EU VAT ID

Businesses that sell to, or buy from, businesses in other EU countries generally need a VAT identification number (USt-IdNr), issued by the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt). A tick in the questionnaire requests it: the Finanzamt passes the request on, and the BZSt sends the number by post, never by email or phone. Allow up to two months. Once the Finanzamt has registered you for VAT, the BZSt also takes requests online.

The USt-IdNr is one of several numbers you will collect. Our guide to Steuer-ID, Steuernummer and VAT ID sorts out which goes where.

8. Waiting for the tax number, and invoicing meanwhile

The Steuernummer comes by post once the Finanzamt has checked the questionnaire. There is no fixed processing time. The BZSt warns that "some weeks" can pass between the questionnaire reaching the Finanzamt and a VAT ID request being forwarded; a few weeks for the tax number is typical, longer if the Finanzamt writes back with questions.

Invoicing has a catch in the meantime. A full invoice must show your Steuernummer or your USt-IdNr (§ 14(4) no. 2 UStG), and so must a small business's invoice (§ 34a UStDV). Only invoices up to €250 can do without (§ 33 UStDV). An invoice sent before the number arrives is incomplete; how to deal with that is a question for a Steuerberater. Our guide to invoice requirements lists the rest.

When the letter comes:

• upgrade an email-only ELSTER account to a full one;
• note the dates on the prepayment notice (Vorauszahlungsbescheid) when it comes;
• look out for one more number, the Wirtschafts-Identifikationsnummer (W-IdNr), which new businesses receive in their ELSTER mailbox, without applying.

9. Outside the Finanzamt

Three things often land in the same month, and none of them is the Finanzamt's business:

• Pension insurance. Some self-employed people are compulsorily insured in the state pension: among them teachers and educators without employees, carers, midwives, craftspeople in the trades register, and people who work long-term for essentially one client without employees (§ 2 SGB VI). Several of these groups must register with the Deutsche Rentenversicherung within three months of starting (§ 190a SGB VI). Self-employed artists and writers are insured for pension, health and care through the Künstlersozialkasse (§ 1 KSVG).
• Health insurance is compulsory for everyone living in Germany (§ 193(3) VVG). Self-employed, you arrange and pay it yourself.
• Your residence permit states whether, and how far, it allows you to work (§ 4a(3) AufenthG). A tax number does not change that.

The order that works