Setting up a (really) small home-run business

I am an artist currently selling my 'wares on ebay- but I'd like to make a website and try and "enlarge" the hobby. Does anyone have info regarding what steps I need to take to get a business license, and can I write off business expenses (such as materials, software purchase, etc) from my taxes?

I am completely business ignorant! Any help is appreciated!

Thanks!

Existenzgründung

Don't know how helpful they are, but you might try the Agentur für Arbeit (formerly known as the Arbeitsamt) and ask them about an Ich AG.

If you're en EU citizen, you can just go to the Gewerbeanmeldung at the KVR and fill out a form. They then send you to the Finanzamt for you to get a Steuernummer. I think then you're all set up. If you're not an EU member, it's a bit more complicated, you have to go to the KVR with some kind of plan of what you will be doing (a business plan) and they'll either send it away to the IHK (chamber of commerce) or just give you a residence/work visa for a selbstständige Tätigkeit..

For the Business plan I'd do an income statement of your expected sales and cost expectations.. but DO NOT go to some german tax consultant for this, they charge a fortune. I paid a bill of 139 Euros yesterday for a 45 minute visit.. what a piss take. The only good information he told me was to keep my Net income below 11,000 Euros a year to avoid paying preliminary taxes. Toytown offers info for an english-speaking tax consultant.. but I emailed her and she never got back to me.. maybe she was busy.

Got all that?

Thanks for the info! I'm not an EU citizen (I'm American), but my husband is German, and I have a visa. Does this make a difference?
Definitely I dont anticipate making more than €11,000! Does the tax law allow for write offs the way US tax law does? Basically I'm just trying to weigh the benefits of "declaring" myself, or just leaving things as they are (ie. ebay) and staying under the radar so to speak.

There's a difference between "Gewerbe" and "freiberuflich" - the latter is for the more intellectual professions such as lawyers, architects, journalists, translators etc. As an artist, I think you'd fall into that category. You don't need to register anywhere - just do it. In your tax return you do an "Einnahme- Überschussrechnung" which is essentially a list comparing your expenses with your income. You might need an accountant to help you do it, though. But you can put every pencil and paintbrush off against tax, not to mention all those times you invite potential customers to lunch... The creativity needed for a tax return can be quite spectacular.

Oh, and one more thing. Many internet providers offer fairly cheap web-shops (buy or rent). Take a look at www.1und1.de . We run a webshop for children's shoes Chooka _ der Kinderschuhversand and the software cost around €1000 plus quite a bit ore to get it looking professional. That's cheap though, compared to a proper store.

@kitty-kat

Someone told me the other day that Ebay cuts off your "private" account when you go above something like 5,000 turnover and forces you to become a "business" account and declare more details about yourself to them.

This makes sense as the tax offices are VERY interested in ebay customers as you can imagine, so ebay are taking steps to offer information before the tax bods start forcing the issue on them.

My wife is German and I am a brit. We have a Gbr over here registered and it is in her name because it was easier.

The single biggest nightmare is that all new companies must file a tax return EVERY month for the first 18 months and within 10 days of the month end. I think it is outrageous myself. Needless to say we employ a bookeeper to ensure this is done on time.

Even when you have no turnover you still file the return. And they query it if your turnover is low (we were dormant for first 2-3 months whilst setting stuff up).

Fun huh!

Oh and don't forget when you get your own website you have all the fun and games over here of payment. They seem allergic to credit cards so you need to offer Lastschrift, Nachnahme, Vorkasse, Paypal, credit card by phone etc etc. Only maybe 1 in 10 of my orders are credit card here.

p.s. @Praa - your site seems to do the job nicely!

@JE
And this is why most big ebay resellers in Germany have more than 1 account, so none of their accounts do 5000 sales a month..

The figure I heard was 5,000 Sterling TOTAL turnover. Once you hit the major figure they turn off the acount until you "upgrade" it. But only gossip. Dunno if anyone can confirm here that has done say 8,000+ Euros turnover?