Are you working as a freelancer or self-employed person in Germany? This can be a fantastic opportunity — but navigating the German tax system can be difficult, especially if you don’t speak German. This guide breaks down the key tax topics in simple English.
We are smarta – a team of certified tax advisors (Steuerberater), tax experts, accountants, communication specialists, and tech professionals based in Germany.
We specialize in supporting international freelancers and self-employed professionals with everything related to taxes, from registration and filings to digital tools and communication with the Finanzamt.
✅ You can find our official registration in the Official Register of Tax Advisers in Germany.
Want to become a client?
Book a free info call here to find out whether smarta is the right fit for your tax needs and how we can work together.
What is a Steuer-ID and a Steuernummer?
Steuer-ID (Tax ID)
Personal identification number for tax purposes
Issued once you register your address (Anmeldung)
You keep it for life
Steuernummer (Tax Number)
Assigned by the tax office when you register as self-employed
Used on your invoices and in all tax declarations
What is the “Fragebogen zur steuerlichen Erfassung”?
Before you start working as a freelancer in Germany, you must fill out this official form to register with the Finanzamt (German tax office).
You must state:
Your profession or service (e.g. graphic design, IT development)
Whether you opt in or out of VAT (Umsatzsteuer)
Your expected annual income
➡️ We help clients complete this form accurately.
Feel free to reach out to us anytime at kontakt-team@smarta-steuern.de or book a consultation here – we're here for you!
Thinking about working with us?
In our free info call, we’ll answer your initial questions and see if smarta is the right tax advisor for you.
➡️ Book your info call here
What is Income Tax (Einkommensteuer)? You only pay tax on your taxable income:
Your income – Business expenses – Personal deductions = Taxable income
Tax rates:
Start at 0% (for low income)
Up to 42% for high earners
Health insurance and other deductions can lower your taxable income.
👉 Want support with your income tax and profit reporting?
Book an info call to find out if smarta is the right tax advisor for you.
What is VAT (Umsatzsteuer)?
The standard VAT rate is 19%. If you're VAT-registered, you must:
Add 19% VAT to your invoices
Pay that VAT to the tax office
Deduct VAT (Vorsteuer) from business expenses
What is “Vorsteuer”? (Input VAT): Get Money Back
When you buy something for your business, like a laptop or software subscription, you pay VAT. If you’re VAT-registered, you can get this VAT back.
Example:
You buy a laptop for €1,190.
Laptop costs €1,190
→ Net price: €1,000
→ VAT: €190
→ You can claim the €190 back in your VAT return
This is called “Vorsteuer” in German.
What is an “Umsatzsteuer-Voranmeldung”?
If you charge VAT, you must report it regularly (monthly or quarterly):
You must list:
VAT you collected from clients
VAT you paid on expenses
We submit these VAT returns (UStVA) for our clients.
What is Reverse Charge? No German VAT for EU Clients
When invoicing businesses in other EU countries, use the Reverse Charge mechanism.
Example:
You invoice a Dutch company — no German VAT.
Write: “Reverse charge – VAT to be paid by the recipient”
Include both VAT IDs on the invoice
You must include your and the client’s VAT ID on the invoice.
What is a VAT ID (Umsatzsteuer-ID)?
Used for cross-border business in the EU
Format: DE123456789
Apply via the tax office
You need a VAT ID to:
Use the Reverse Charge rule
Invoice EU clients without charging German VAT
Buy software from EU providers like Google or AWS
➡️ We help you request your VAT ID.
We help our clients request their VAT ID and apply Reverse Charge correctly.
What is the Kleinunternehmerregelung?
If your revenue is:
Less than €25,000 in the last year
Expected under €100,000 this year
Then you can opt out of VAT:
No VAT charged on invoices
No VAT returns required
But: no input VAT refund either
This option is simple and often recommended for beginners who provide goods or services directly to consumers.
However, it's not always the right choice. We help our clients decide what suits their business best.
👉 Unsure if you should register for VAT or apply the small business rule?
Schedule your info call to learn how we help our clients make the right choice and handle VAT filings.
What is Regular VAT (Regelbesteuerung)?
If you don’t qualify or opt out of the small business rule, you’re under the standard VAT system.
That means:
You charge VAT
You reclaim VAT (Vorsteuer)
You file VAT returns regularly
We help you decide what’s best for your case.
What is the EÜR? How Freelancers Report Profit in Germany
EÜR = Einnahmen-Überschuss-Rechnung
A simple profit & loss statement.
It includes:
All income (e.g., invoices paid)
All business expenses
The result: your profit, used to calculate your income tax.
We create this for you.
Freelancer or Trader? What’s the Difference?
Freiberufler (freelancer):
Software developers, writers, consultants
✅ No trade tax
✅ Simple registration process
Gewerbetreibende (traders/commercial business):
Selling products, e-commerce
❌ Must register a business (Gewerbeanmeldung)
❌ Must pay trade tax
➡️ We classify your work correctly.
Do I Need to File a Tax Return?
Yes! Freelancers must file every year.
Deadlines:
Regular: July 31 of the following year
With a tax advisor: end of February (following year + 1)
We handle your income tax return, VAT return, and all related documents.
👉 Want us to handle your tax returns and deal with the Finanzamt for you?
Book your free info call to learn how we work and whether we're a good fit for your situation.
What is a Tax Class (Steuerklasse)?
Tax classes mainly apply to employees.
If you freelance and are employed part-time, your tax class impacts your payslip deductions.
We explain this if it applies to you.
What is “Scheinselbständigkeit”? (Fake Self-Employment)
If you:
Work mostly for one client
Follow fixed hours like an employee
You might be considered falsely self-employed — with serious consequences.
➡️ We help assess your risk and stay compliant.
Health Insurance for Freelancers in Germany
Health insurance is mandatory. You must choose:
Public insurance (gesetzlich): Safe and stable
Private insurance (privat): Possibly cheaper when young, but expensive later
➡️ We guide you through registration and deductible expenses.
Summary: What We Do at smarta Steuerberatung
We help with:
Tax registration in Germany
Tax ID and Steuernummer
VAT registration and returns
EÜR and income tax return
Trade tax (if applicable)
Contact with the Finanzamt
Optimizing your taxes – legally
And: We speak your language.
📞 Need Help with German Taxes?
Whether you’re just starting or need support with filings, we’re here for you.
➡️ Ready to take the next step?
If you're interested in working with smarta as your tax advisor, you can book a free info call here.
In this call, we’ll explain how our service works and check whether we’re a good fit for your situation.
➡️ Email us: kontakt-team@smarta-steuern.de
Already a client? Write to us via the app or email. We’ll respond quickly.
For our clients:
Feel free to reach out to us anytime at kontakt-team@smarta-steuern.de or book a consultation here – we're here for you!
Not a smarta client yet? No problem!
Book an appointment here for our comprehensive startup package or a consultation if you only have questions about specific topics.
Further questions?
Contact us via the app or by email at kontakt-team@smarta-steuern.de if you want to learn more about our consulting services or have other tax-related concerns.