Freelance while employee

41 posts in this topic

Oh, and finally, going back to my original question, should I then write that I am umsatzsteuerpflichtig in my invoices from now on? 

Or is this still nothing to do with the income tax?

Thank you again! :)

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5 hours ago, Sen Te said:

Oh, and finally, going back to my original question, should I then write that I am umsatzsteuerpflichtig in my invoices from now on? 

Or is this still nothing to do with the income tax?

Thank you again! :)

Umsatzsteuer is VAT. You are not umsatzsteuerpflichtig as long as you don't go over the 17.500€ freelance limit in a year.

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I was wondering if someone could help me with an issue that, as far as I aware, was not dealt with here before. I am a full time employee with the LMU and, in 2016, I also did some freelance work on the side (scientific writing) for which I got about 2000 EUR. I declared this amount to the German finances earlier this year and today I received a letter saying that I know have a new Steuernummer. I do not have a business as a freelancer since the income I get from my writing is very irregular. Does the change in Steuernummer mean my Steuerklasse has changed as well? The letter mentions nothing about Steuerklasse, but I'm worried the Finanzamt is seeing my occasional freelance work as a second job, which would prompt them to change my Steuerklasse from I to VI (meaning paying a lot more tax on my normal, regular income). Can anyone clarify whether that is the case?

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No, don't worry, your Steuerklasse wasn't affected.

 

And you didn't quite understand about Steuerklassen (though knowing about tax class VI for a second job is impressive!).

Only if you had a second job (job = being an employee, i.e. employment), would the income from that second employee job be taxed in tax class VI - but even then your original main job would still remain taxed in tax class I. 

 

And in your case you don't even have a second employee job, but just self-employed income.

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The purpose of the tax class is to ensure that enough tax is withheld at source so you don't get a big tax bill at the end of the year. This happens alot in Canada with retirees who might have several small pensions. None of them apply withholding tax so end of the year the person files a tax return and then owes some money. 

 

Secondly (ignoring deductible expenses) and extra money you earn is taxed at your marginal tax rate. In other words think of that 2000 as a pay raise, you earn more you pay more in tax. 

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Somehow I was not notified of your messages until now... Thanks for the info! I did call the Finanzamt the day after I posted, and they confirmed the change in Steuernummer had nothing to do with the Steuerklasse, which remains unaffected.

 

@PandaMunich: thanks for the clarification regarding what classes as a second job, very helpful. @Tim Hortons Man: thanks for the "pay rise" comparison, which will help me have a better idea of how much extra tax I'll have to pay. 

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Hi! I wrote on this forum back in July and now have a related question, which I'm hoping either @PandaMunich or @Tim Hortons Man can help with. Apologies if this is the wrong thread.

 

As I mentioned before, I am full-time employed with the LMU and doing occasional freelance work (scientific writing) on the side, for which I make no more than the 17,500 EUR VAT limit. Last year, I invoiced my clients through the tax system in Portugal, as that's where I'm from and where my main client is based. I declared the additional income I made through my freelance work to the German authorities, and after that I got a new tax number (in the past I had only the tax number associated with my LMU job).

 

I'm now interested in expanding my freelance activities to Germany and would like to start writing invoices (VAT free). My question is: can I do this? A search on Google and on the Toytown forum seems to indicate all I need is a steuernummer associated with my freelance work, which I have had since I did my tax declaration. Are there any other restrictions, regarding for example which companies I can invoice (any in the EU?)? Can I simply get one of the standard VAT free invoice templates for Germany and invoice companies who commission work from me? 

 

Thanks!

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1 hour ago, btferreira said:

Last year, I invoiced my clients through the tax system in Portugal, as that's where I'm from and where my main client is based.

 

You shouldn't have done that.

You should have written German invoices, since you're resident in Germany.

 

1 hour ago, btferreira said:

Are there any other restrictions, regarding for example which companies I can invoice (any in the EU?)?

 

Please read:

 

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Thanks for your help @PandaMunich and for the helpful link! Regarding your first comment: in addition to being registered in Germany, I am also registered with the Portuguese authorities as a Portuguese national resident in Germany, meaning I have both German and Portuguese tax numbers. According to a specific regime in Portugal, I can write one invoice ('Ato Isolado') per year in Portugal and, if the invoice totals less than 10,000 EUR, as a non-resident in the country I don't need to pay taxes for it there. I pay all due taxes in Germany, which is where I declared the full amount I received through this freelance work done abroad. The German tax authorities didn't raise any issue with this, and I did send them the invoice from Portugal. In any case, this is precisely what I want to change now as it would be helpful to be able to write more invoices a year.

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Hello, I have a full time job and I also registered for a freelance activity. I have now to do the tax paperwork for this activity. Thing is ... my full time employment is paying for a tax advisor, but they will not take care of this freelance activity. So I would like to do this part by myself, otherwise it would cost me too much and there will be no point in having a freelance activity anymore :)

 

So I read that I am supposed to make a profit loss statement, it should be the anlage S form ... do you know where to find this form, where should I fill the info regarding the income. I have no loss and no other expenses I need to declare. It should be very very easy, still I am stuck ad don't know what to do.

 

Anyone can help me? Thanks!

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Your tax return has to contain the freelance income

--> ask the tax advisor to also declare it for you, he will charge you only for that part.

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50 minutes ago, SeeLandSky said:

 

So I read that I am supposed to make a profit loss statement, it should be the anlage S form ...

 

No, the profit loss is Anlage EÜR and once you know your (taxable) profit (I doubt that you really have nothing to set off, e.g. the tax consultants cost) you put the amount either in Anlage S (if you are a Freiberufler) or in Anlage G (if you are a Gewerbe). But as Panda suggested: Let the tax consultant do that because you only do one tax declaration that includes the freelance income and all relevant forms.

 

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Hi all,

 

I am a non EU citizen and working as a full time project manager in a startup firm(40hr/week). it has unlimited contract. I am also working as a freelancer for another startup (20hr/ month) (limited contract till May). My visa allows me to work as a freelancer apart from a full time job. but I am confused if I have to apply for a 'steuer nummer' at the finanzamt ? Can I invoice with my steuerID or I have to apply for steuernummer ? Can someone please help me with this ?

 

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On 5.3.2019, 11:52:30, Uroosa said:

. but I am confused if I have to apply for a 'steuer nummer' at the finanzamt ? Can I invoice with my steuerID or I have to apply for steuernummer ? Can someone please help me with this ?

 

 

You have to notify the Finanzamt, fill in the 'Fragebogen zur steuerlichen Erfassung' and get your Steuernummer after handing the Fragebogen in.

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On 18/06/2017, 12:34:32, someonesdaughter said:
Quote

By the way, maybe this is important: I'm not registered as a freelancer.

 

You need to be registered and you need to do a yearly tax declaration. Besides VAT there is income tax. Income tax is calculated based on your taxable income and that taxable income includes all sorts of income – freelance and employee income in your case. Your income tax on the employees part is deducted automatically, but your freelance income is unknown to the tax office ...

 

I heard from people being employed as a main job and then earning a small income on the side without the need to register at the Finanzamt to get a new number/tax position. Of course those earnings still need to be declared the next year in the tax statement as "Einkommen aus selbständiger Tätigkeit" and taxes may need to be paid at that point.

What I don't know is if a person freelancing this way is able/should produce and send invoices to their client, or if the client is just making the payment and providing some form of document that states the nature of the work that was provided. Does anyone know about this?

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6 minutes ago, timerunning said:

 

What I don't know is if a person freelancing this way is able/should produce and send invoices to their client, or if the client is just making the payment and providing some form of document that states the nature of the work that was provided. Does anyone know about this?

 

To send in invoices you need a tax number, in order to show the VAT in the invoices (and companies usually expect to get invoices with VAT shown), you have to be registered with the tax office - because you have to make monthly VAT returns ... it all comes down to the registration. And I also don't understand why you want to avoid that, it's only minimal effort. 

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12 minutes ago, someonesdaughter said:

To send in invoices you need a tax number, in order to show the VAT in the invoices (and companies usually expect to get invoices with VAT shown), you have to be registered with the tax office - because you have to make monthly VAT returns ... it all comes down to the registration. And I also don't understand why you want to avoid that, it's only minimal effort. 

Thanks for this info. Based on it, I assume that people who take on side activities without registering as freelancers are not producing invoices and is then up to the company who offered them the contract to take care of issuing payments according to what they agreed to.

 

To answer your question regarding why one would want to avoid registering:

If trips to the Finanzamt and paperwork in German are avoidable, I would always want to avoid them.

Also, I think that registering as freelance means having to give an estimate of how much you think you will earn in a year, so that they can ask you for taxes in advance. I don't find the idea nice if you are trying something for the first time and are not so sure about how much you will get. What if you earn less than you thought? What if you stop that activity completely? You are then left with a tax position you don't need and possibly the Finanzamnt asking you about money that you haven't made...It would mean more paperwork and waits etc. to fix it.

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I did read through the forum still confused about my situation. 

 

I have a permanent job and I don't do other work activities in Germany as self-employed.
However, I have an account on a freelancing website and a friend of mine uses this account to acquire micro projects from this website.  The project costs are transferred to my bank account because it is in my account on this website. 
My question is that since I don't do anything in these projects and I don't get money, should I pay taxes?
in 2017 he earned around 400€ and 2018 he earned 245€. so it is pretty low income and I already declared my taxes for 2017. 

should I stop him from using this account?

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9 hours ago, alexeisenhauer said:

I did read through the forum still confused about my situation. 

 

I have a permanent job and I don't do other work activities in Germany as self-employed.
However, I have an account on a freelancing website and a friend of mine uses this account to acquire micro projects from this website.  The project costs are transferred to my bank account because it is in my account on this website. 
My question is that since I don't do anything in these projects and I don't get money, should I pay taxes?
in 2017 he earned around 400€ and 2018 he earned 245€. so it is pretty low income and I already declared my taxes for 2017. 

should I stop him from using this account?

Regardless of the country you live in, if someone uses your account to make money through online freelance projects (or anything else) and that money goes to your bank account, it's gonna look like that income is yours.

My personal opinion is that it's unlikely that anyone will start an investigation for such a low earning account, but you shouldn't let your friend use your name, login and bank account. 

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