Freelance categorisation in Germany

Question

I'm going to visit Berlin Pankow Finanzamt to apply for Tax ID as a Freelancer, so at the moment I'm filling the form "Fragebogen zur steuerlichen Erfassung".

There are two important lines asking for "Ausgeübter Beruf" and the other "Art der Tätigkeit (genaue Bezeichnung des Gewerbezweiges)",

• I did lots of research and it seems that IT Consultant will count as a trader and not a freelancer. Is that so?

The specific positions which I have worked so far, and will freelance will be "[Senior] Network [Security] Engineer" and "[Senior] Network [Security] Consultant".

• What do you suggest to fill in these field?
• And how should I be careful when invoicing my customer in terms of Service Descriptions?

Thanks!

Answer 1

I've been a German freelancer for 3.5 years now and this stems from the discussion with my tax consultant (steuerberater) at the time:

In Germany, qualifying as a "freiberuflerit" depends on several factors:

1. You need to have an academic degree, i.e. Dipl./Ing. or such.
2. The job you are doing must be in that line and be of consulting or engineering quality.
3. You cannot trade goods, i.e. buy and sell with the intent to make profit.

However, even if all of these are met, your safest bet is that your local tax office (finanzamt) that will do your taxes approves that you qualify as a freelancer. Point 2. has some flexibility, especially if you are a foreigner and point 1. is not met with a German degree.

So I advise to contact a German tax consultant (close to where you will work that can easily contact the tax office) and discuss the matter with them.

Answer 2

Yes, that's right, freelancer in the meaning of Freiberufler is reserved for some special jobs like journalists, artists, nurses, dentists and some others. Well, it includes business consultants, so you should at least ask your local tax authority - IT's part of the business ...

You find the corresponding law in EStG § 18 Abs. 1: http://www.gesetze-im-internet.de/estg/__18.html