I arrived to Germany recently and do not yet speak German. I would like to do some work in my spare time which consists of creating visual artwork.

In Germany, it is important for tax purposes to decide if one is a "freelancer"/"Freiberufler" or "tradesman"/"Gewerbe". The distinction seems to be tricky sometimes, and I would like to restrict my activities to those that can be done as a "freelancer" (the simpler and more advantageous tax class).

I am looking to potentially do the following types of work:

  1. Create commissioned artwork (painting, drawing, graphic design, etc.). The client tells me what they want and I create it for them.

  2. Create artwork of my own choosing (painting, drawing), then sell the unique framed copy.

  3. Create artwork of my own choosing, then sell multiple framed prints.

  4. Create artwork, then print it on mugs, t-shirts, etc. and sell them for a significantly higher price than the cost of the plain mugs/shirt/etc. on sites like Etsy.

My question is: Which of these qualify as "freelancing" for tax purposes in Germany?

I am certain that 1. does, and I suspect that 4. does not (though I am unsure). 2. and especially 3. are less clear to me.

While any response is welcome, I am primarily looking for referenced answers. I find some of the categorizations non-obvious. For example, I learned from google translating this webpage that if operating a dance studio, ballet counts as "freelancing" but standard dance does not.

Advice on how I might go about researching the answer is also welcome. This is a hobby for me that would generate very little income, so going to a tax advisor is too expensive for the moment.

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Carina is a new contributor to this site. Take care in asking for clarification, commenting, and answering. Check out our Code of Conduct.

To my knowledge (IANAL) your occupation is one of the classical "Freiberufler" ones, as I would think it all qualifies as "Artists or Graphic designer" as long as the artworks are your own work.

Here is a very good starting point.

If it is really an advantage to be "Freiberufler" then "Gewerbetreibender" is up to a lot of factors, and depends on your individual place of residence (Gewerbesteuer), turnover and your customers (VAT-Deductible or not?).

I would strongly recommend to get individual counseling on that and also any implications it might have on your social security status.

You can also often get some free consulting at your local Arbeitsamt and IHK. But also invest some € for someone professional - changing things down the road or even be re-classed by the Finanzamt when you are somwaht succesful down the road will hurt much more than the few 100€ now.

  • Do you agree with the other answer that it is a good idea to go to the tax office and ask in person? I wanted to do this, but in some countries at least this would not be a good idea. They would simply give the most conservative answer possible just to avoid any liability, and possibly even suggest reclassifying me as Gewerbe immediately, even though I have not yet done any of the activities I am not 100% sure about. Now maybe in Germany this is not the typical attitude. Hopefully/probably it's not. But I would like some confirmation that they're indeed helpful before going there in person. – Carina Oct 10 at 9:13
  • While a tax consultant is obviously a good idea in the long run, at this moment I am simply testing the waters and looking whether I can extend a hobby into something more. This is also why I want to stay as Freiberufler. Just try the simplest thing first, be conservative about activities to make sure I fit into this class, and see where it goes. The entire profit of the venture may be comparable to a tax advisor's fee so I don't want to do that yet. – Carina Oct 10 at 9:16
  • @Carina: There are a lot of things to consider before you start. I met a riding instructor who was under the impression he did not have to pay VAT and then hat to repay for 3 years past ... don´t save 200€ on counseling now to make expensive mistakes which will hurt you down the road. If you expect to earn less than that you will probably have luck just declaring it a "Privatverkauf" which is tax exempt up to 600€/pa – Daniel Oct 10 at 9:32
  • Also, counsleing at the IHK, Finanzamt and Arbeitsamt are free, so if you find something there you don´t even have to invest anything but your time. – Daniel Oct 10 at 9:33

IANAL, but Freiberufler is actually pretty well defined: Most ventures that you need to be uniquely qualified for can be done freiberuflich - Meaning lawyers, engineers, educators; Artists are deemed to be uniquely qualified across the board, as nobody can really rate art... . Gewerbe is mostly selling not-your-own/plain products, or working in a tradecraft (carpenters,...) . Beware, though: Freiberuflichkeit can be 'infected' by Gewerbe, and then looses all bonuses: So you need to make extra clear that it is only your artworks that get onto those mugs and T-Shirts, no other works, no plain mugs, otherwise your whole enterprise will be judged a Gewerbe as a whole.

Best you just hit up the Finanzamt for advice on what to do and not to do. Go there in person, and describe what you plan, they'll give you advice on what to avoid - they have no interest in hassling you, and will give you fair advice.

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