Registering as self employed

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Any advice/information on this dilemma would be most welcome!

 

I quit my job at the end May after two years of full time employment. I registered as unemployed afterwards, but as I quit and was not fired I did not receive any money. I incurred a "Sperrzeit" of 12 weeks, which was fine. In the meantime I went on holiday, during which time the arbeitsamt wanted to meet me. I told them I was on holiday and asked if I could reschedule the appointment and incurred another "Sperrzeit" of 4 weeks. Irrelevant, just some background info!

 

I have now found a new job as a freelance teacher and am currently in the process of registering as self employed. When I received the offer for my job, I immediately informed the arbeitsamt that I had found work. This was almost two weeks ago and I haven't heard from them yet.

 

I went to my accountant today who is helping me get set up as self employed and he told me that I now need a lot of forms and paperwork from the arbeitsamt before I go to the finanzamt. He also said it could take up to four weeks before I am fully registered, but I can work and send invoices for my services in the meantime.

 

Has anybody had this experience or been in a similar situation? I find the level of paperwork here rather overwhelming and though my German is quite good, it gets tricky when it comes to things like this where there are lots of technicalities! I thought I could just sign off from the arbeitsamt, as they haven't given me a cent and start working as self employed once all the paperwork was in order, but according to my accountant today it isn't that straight forward.

 

I would also appreciate any information you can give me about being self employed in general. Seems there are a lot of catches and surprises when it comes to German governmental organisations!

 

Thanks in advance to those who can help out.

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Has anybody had this experience or been in a similar situation?

 

Of course (on switch status and becoming s-e). There are tens of thousands of self-employed people in Germany and, if you look on this site, you'll see a lot of discussion (particularly on the Finance and Business boards).

 

Being self-employed here is very easy. You fill out one form from Finanzamt to register your status (note- you can get this fom on-line). You produce a year end summary of your net income (as well as doing the usual personal tax returns). You may have to fill out a VAT return (depending on scale / nature). End.

 

If your accountant is giving you the "it's so difficult and bureaucratic" nonsense, dump them and find one that knows what they are talking about. Life here is much easier if you avoid the common German line of making things seem far, far harder than they are. And you'd be well-advised to forget the "there are catches" line as well. Just because you don't understand it, that doesn't mean it has "catches" in it. It's a straightforward system, very much like, say, the UK one. I find being self-employed in Germany absurdly easy. It's self-fulfilling. Go on about how hard it is, and it probably will be. See it for the easy, low-tax, slacker life it usually is, and it's often a doddle.

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Thanks Swimmer,

 

My problem is not with the registration of being self employed, but doing so having been registered as unemployed. Supposedly that's what makes things more complicated.

Also, I have read through the other posts on this, but none deal with this issue.

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Keep all receipts. I usually find it easier to have a box or a file or a cubby-hole for them.

 

 

To help make it slightly easier for your accountant (and slightly cheaper for you), before you send the stuff off to your accountant, do this.

 

1. Take your bank statements.

2. Take your receipts.

3. PUt all the receipts and invoices that are mentioned on each individual sheet of the statement behind the sheet they come up on.

 

I bank with the Postbank and there are usually about six transactions on each sheet. So money gong out that you have paid to keep your business going (e.g. stamps, toner, stationery etc.) and money coming in (e.g. paid invoices) should be backed up by a piece of paper evidence.

 

You will need to send out consecutively numbered invoices.

 

What I do is this. I have a short code for the company (e.g. the initials or if it is just a company name of one word then the first three letters) plus a number. E.g. PWC-1, KPMG-2, AA-3, PWC-4

 

 

Also, keep a ledger of what you invoice. I have a nice hardbacked book and use two pages at the same time.

 

These are my headings (Keep in mind that I translate now):

 

Customer name

Invoice number

Description (of what I translated in case I have a follow-up translation)

Price (what I charge that company)

Total (price x number of lines) (in your case - price x number of lessons)

VAT (VAT of 19% on that price)

Total (Previous total plus VAT)

Invoice sent (date on the invoice)

Invoice paid (date on the bank statement)

 

 

Always ask your customer to mention the invoice number when making a payment. This will make it easier to check what bill has been paid.

 

 

You don't need to charge VAT yet, but you can. Keep in mind that you only have to earn EUR 17,500 in one year before you need to charge it. One year I earned quite a bit and didn't realise how low this threshold was. I had to pay VAT in retrospect. Customers aren't so pleased if you charge them retrospectively so I had to absorb most of that.

 

So... it might be better if you charge VAT from the word go. It will also make you look more successful.

 

 

 

Another thing to do is that whenever you are paid, put a proportion of that into a savings account. I have an instant access account with the Garanti Bank. They do mainly telephone banking. I used to shove 33% of everything that came in into that account. I have now upped it to 40%.

 

This money is to cover tax (of about 19%) and VAT (of 19%) and health insurance (which I pay yearly).

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hi, i just wanted to reopen this topic as no answer was ever given really...

 

I'm in a similar dilemma right now after having just moved to Berlin. I was self-employed until I came here with my husband in September, and plan to register as unemployed. I don't expect much in the way of benefits other than slightly cheaper transport costs, entrance to museums etc.

 

The thing is I want to start my own business next spring and register as self-employed. I'm starting to wonder if going through with the process of registering unemployed is going to be more hassle than it's worth. My German isn't great either so I'm pretty overwhelmed at the moment... Any advice greatly appreciated!

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... I don't expect much in the way of benefits ...

As formerly self-employed/freelancing you aren´t entitled to unemployment benefits anyway ...

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Good topic! Can someone explain a little more on the VAT? I just did some one-off translating work (I'm currently registered as unemployed with the Agentur fuer Arbeit), and need to write a receipt. Since I haven't earned any money at all in 2009 until now, do I have to worry about charging VAT? There's no way I'll come close to the 17500€ threshold Nina mentioned. Isn't that how 'mini-jobs work? ie if you earn less than 400€/month (average over a year, right?), then there's no worries about taxes?

 

Back to unemployed benefits, how do you get cheaper entrance to museums? I was just at the Porsche museum, but had no proof that I was unemployed, so didn't even both. I could've saved a few €...

 

Thanks!

 

dave

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When you register with the Finanzamt as a self-employed translator, you can choose whether you want to charge VAT or not (provided your turnover is <17500€). I'm not really sure what you're trying to do/did. You either need to be employed by the company you're working for or registered as self-employed. The Arbeitsagentur will probably want to know about this income too.

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Back to unemployed benefits, how do you get cheaper entrance to museums? I was just at the Porsche museum, but had no proof that I was unemployed, so didn't even both. I could've saved a few €...

 

You register as unemployed of course (so you have the papers that prove it, otherwise we can all just say we are unemployed). The price you pay for a lot of "cheap" or "free" stuff from any state is usually engaging wih it, being processed by it and meeting the demands and obligations it puts on you in return.

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If you go from being unemployed to being self employed, you should find out about getting the Gründungszuschuss from the Arbeit Agentur. If you qualify, you will get Arbeitslosengeld for 6 months even thought you are earning money. It's a lot of paperwork but it's worth it.

 

Also as a self employed person you can choose to pay for "Freiwillige Weiterversicherung gegen Arbeitslosigkeit" which will entitle you to Arbeitslosengeld if your business fails/you cant find new clients. It costs ca. 25 euro per month.

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"You fill out one form from Finanzamt to register your status (note- you can get this fom on-line)..."

 

Is anybody able to post the link where I can find this form? I have looked on the Finanzamt website but Im not sure which it is...

many thanks,

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My daughter is a student, living in Freising. She has got a part time job teaching Yoga once a week for a few Euro; she is hired by some group or the other.

She has now asked me if she has to register as self-employed and how to go about the formalities.

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1 hour ago, arunadasi said:

She has now asked me if she has to register as self-employed and how to go about the formalities.

 

The same way she (or you) did for her (or was that another daughter?) gardening.

 

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1 hour ago, someonesdaughter said:

 

The same way she (or you) did for her (or was that another daughter?) gardening.

 

Same daughter... now, she has her Hauptwohnsitz at my place in Baden-Württemberg so the Finanzamt stays the same I guess?

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26 minutes ago, arunadasi said:

Same daughter... now, she has her Hauptwohnsitz at my place in Baden-Württemberg so the Finanzamt stays the same I guess?

 

Yup – is she still registered with that gardening stuff? Then she simply has to change her 'Gewerbeschein' (add the yoga teaching, will cost s.th.) and include the income in her tax declaration. That's it. :) 

 

If she gave up her gardening Gewerbe she has to start from scratch (Gewerbe anmelden, then steuerliche Erfassung).

 

btw she's still within the earning limits, health insurance wise?

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8 minutes ago, someonesdaughter said:

 

Yup – is she still registered with that gardening stuff? Then she simply has to change her 'Gewerbeschein' (add the yoga teaching, will cost s.th.) and include the income in her tax declaration. That's it. :) 

 

If she gave up her gardening Gewerbe she has to start from scratch (Gewerbe anmelden, then steuerliche Erfassung).

 

btw she's still within the earning limits, health insurance wise?

 

She deregistered from gardening when she became a student. She's always been well below the earning limits -- it's really just pocket money.

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Hello! I'm an american who has been self employed since 2007. I sell things on ebay and make art to sell and also take art commissions. 
Most, if not all, my business is with online customers in the US and I plan on making a virtual pet website, and will take payment for custom adoptables from that site. It will be registered within the US and be hosted within the US. 

I plan on marrying my gf that I have right now and moving to berlin (she lives in berlin). 

I heard that you need to register as an artist correct? How will my online business be affected?

I still want to do ebay, but I'm unsure of the resale rates/values and how easily it would be to get product in berlin (I buy things at thrift stores and flip them online). 

currently in the US I make about $6k or less a year, and pay about $100-$300 a year in taxes. (which isnt bad, because I get food stamps). 
I plan on being with my gf (once I move here, wife.) due to health issues and food insecurity/ living conditions currently in the state. ALSO SHES WONDERFUL AND I LOVE HER.

My real question is, if I still make $6,000 a year on my own business, and she remains employed, what do I have to pay tax on specifically? or register as?
Also my other concern is healthcare, but she said spouses are covered in her insurance plan from her employer. 

my previous doctors here tried to get me on some sort of welfare-like plan in the past, but since my state doesnt provide welfare (only federally) and I dont qualify for any monetary assistance, I've been self employed. I get 100% free healthcare here though lol. so thats a plus I guess. I do enjoy being self employed though, and I want to continue to be, as a regular job I've tried in the past and couldnt do, due to health issues. 

I guess my real question is, what would they qualify me as in germany? I need medication to survive, so I'll have to find a doctor before I move there.

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Welcome to Toytown zrcalo

 

I really hope you are able to make your plans work out as you envisage. Not least because I am a great admirer of those who are prepared to put in exceptional efforts to achieve their life goals, but especially when the attainment of that achievement demands the will to overcome a mountain of adversarial bureaucratic hurdles and remain calm and resolute in spite of frustratingly incomprehensible procedures, regulations and customs interfering with their progress and affecting their circumstances.

 

You really will have a bureaucratic mountain to climb to get where you hope to be because, with the exception of what I presume to be the one key factor which is motivating your quest - the girlfriend you plan to marry - almost everything else you have outlined about your circumstances could be considered by the German authorities to be grounds to refuse you any form of visa or residence permit. 

 

I'm sorry to point to such a bleak outlook but it would be of no help to you to BS you and say, "Sure, you can do all that - just dive in, the water's lovely!"

 

In spite of the fantastic job of marketing itself the city does, make no mistake, Berlin is the economic black hole of Germany and it is flooded with underemployed and/or largely unproductive non-German speaking people from every corner of the globe.

 

The authorities who administer foreigner's immigration, visas, work permits as well as those responsible for residents' registrations are all inundated with work and barely able to give more than a few minutes to each applicant they see.

 

This leads to many foreigners becoming stuck in a cycle of having to make multiple visits to clear each stage of their process - often their situation is aggravated by a complete lack of German language ability. For many it is a shock to discover that by law the officials are only allowed to communicate in the official (German) language.

 

To get a handle on your multi-issue questions you will need help from several of our TT specialists so I'll tag a few in the hope they can give you some ideas on how to begin taking positive steps in the right direction before you make an unintended error which may dislocate your own progress.

 

@engelchen is our visa and work permit expert and a long-term Berlin resident. You need have no doubt about the accuracy of her input.

 

@PandaMunich knows more about the German tax system than any mere mortal does and is a whizz when it comes to self-employment or e-bay selling issues too.

 

@Starshollow and @john g. are experts on expat-oriented insurance matters. Their input on helping you avoid any pitfalls re health insurance will be essential. A wrong or hasty decision taken during their initial few months in Germany, or even before arrival, is often the root cause of major, sometimes disasterous, upheaval in many immigrants life plans.

 

There are many other TTers whose advice may prove invaluable to you too and, until others have posted, there is nothing better you can do to increase your knowledge of what awaits you than to investigate the depths of the TT archives.

 

Use the site search with diligence. Virtually nothing you could think of to ask will not have been asked and answered multiple times before. The majority of those answers remain valid even if they were posted 2, 4, 6 or 10 years ago.

 

IMO the path of least resistance may well prove to be one in which your girlfriend flies to the US and marries you there. That could ensure your rights to enter, reside, take up employment and be health insured via your wife's scheme and also give you a few additional advantages tax-wise.

 

Otherwise, until you are married (getting that done in Germany being a nightmare in and of itself) and in order to get a visa which permits you to stay longer than 90 days, you would have to create a convincing bullet-proof self-employed income case with evidence showing why the German government could never under any circumstances be faced with a question of having to provide any form of support or services to maintain your life or health, now or at any time even beyond the age of retirement.

 

Good luck, and please, please, please,... stop that poor dog from running!

(Most TTers are not fans of moving avatars.)

 

2B

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