Summary
In Germany, Freiberufler are self-employed professionals who work independently in intellectual, scientific, educational, or creative fields. Their status comes with significant advantages, such as exemption from trade tax, simplified accounting, and more autonomy. However, they also face full personal liability and must manage their own insurance and pension arrangements.
Contents
- Intro
- Freiberufler vs. freelancer
- Pros & cons
- Liability
- Legal and tax requirements
- Accounting
- Conclusion
Intro: What is a Freiberufler in Germany?
In Germany and other European countries, self-employed people fall into two main categories: liberal professions 💬freiberufliche Tätigkeiten and commercial trades 💬gewerbliche Tätigkeiten. This distinction is crucial because it affects how you register your business, keep your accounts, and pay taxes.
A Freiberufler 💬liberal professional is someone who works independently in a profession that relies on personal expertise, education, or creative skill—rather than on trade or product sales. Typical examples include doctors, lawyers, architects, journalists, designers, and consultants.
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These professions are recognised as serving the public good and therefore enjoy simplified administrative and tax rules. Anyone whose business activities do not meet the Freiberufler criteria is considered a commercial trader.
Both Freiberufler and commercial traders are self-employed and personally liable for their business obligations, meaning they bear unlimited liability with their private assets.
Who qualifies as a Freiberufler
Only certain professions can officially claim Freiberufler status (§18 EStG). These are recognised by the tax office 💬Finanzamt and fall into specific fields such as science, education, art, culture, and writing. If you are unsure whether your work qualifies, you can request a classification ruling from your local tax office.
The law distinguishes between catalogue professions 💬Katalogberufe and catalogue-like professions 💬katalogähnliche Berufe:
- Catalogue professions: doctors, lawyers, architects, journalists, teachers, psychologists, midwives
- Catalogue-like professions: photographers, designers, consultants, copywriters, actors
In short, if your income mainly comes from personal expertise or creative work rather than trade or product sales, you may qualify as a Freiberufler in Germany. But beware that the lines are often blurry. More often than not, the finance office will assess your individual case before granting the Freiberufler status.
Freiberufler vs. freelancer
The words Freiberufler and freelancer are often used interchangeably, but they describe different things. Freelancer refers to how someone works—independently, gig-based, without an employment contract—while Freiberufler refers to a specific legal and tax status.
| Aspect | Freiberufler | Freelancer |
|---|---|---|
| Meaning | A legal status under German tax law for defined professions | A way of working independently, without an employment contract |
| Focus | Profession and qualifications | Working arrangement or business model |
| Registration | Must register with the tax office only | Usually needs to register with the trade office |
| Tax obligations | Exempt from trade tax; pays income tax and VAT | Depends on activity type; may owe trade tax if classed as commercial |
| Accounting | Simplified profit and loss statement | Depends on business type and scale |
📌In short, freelancer is a broad term, while Freiberufler has a specific meaning under German tax law. A person can be both, but not every freelancer qualifies as a Freiberufler.
Pros & cons of the Freiberufler status
Freiberufler and liability
Freiberufler are personally liable for all business obligations. This means that if your business causes financial loss or damage, you are responsible with your private assets. There is no separation between personal and professional liability as there would be in a limited company.
To protect yourself, it’s strongly recommended to take out professional liability insurance, especially if you work in consulting, medicine, design, or architecture. This insurance covers claims for financial or property damage caused by professional mistakes.
If you want to limit your personal risk while keeping your Freiberufler status, you can form a PartG mbB (partnership company with limited professional liability). This legal form is only available to a subset of regulated professions governed by professional chambers, i.e.
- Medical doctors, dentists and veterinary surgeons,
- Notaries, lawyers and patent attorneys,
- Tax advisors, public auditors and chartered accountants,
- Pharmacists,
- Psychotherapists,
- Architects and urban planners,
- Engineers,
- Midwives and nursing professionals.
Legal and tax requirements
1. Registration and legal status
Freiberufler do not need a trade registration 💬Gewerbeanmeldung. Instead, they register directly with the tax office by completing the tax registration form 💬Fragebogen zur steuerlichen Erfassung.
Once registered, you receive a tax number 💬Steuernummer, which you use for invoicing and submitting tax returns.
Freiberufler can also join together to form a civil law partnership 💬Gesellschaft des bürgerlichen Rechts (GbR) or a partnership company 💬Partnerschaftsgesellschaft (PartG). Both types of partnership allow multiple Freiberufler to collaborate while maintaining professional independence.
2. Taxation
Freiberufler benefit from reduced tax obligations compared to commercial businesses.
- No trade tax 💬Gewerbesteuer: Freiberufler are exempt from this municipal tax, which otherwise applies to commercial traders.
- Income tax 💬Einkommensteuer: If your annual turnover is below €22,000, a simple income tax return is sufficient.
- Value-added tax (VAT) 💬Umsatzsteuer: Freiberufler must charge VAT unless they qualify for the small business regulation 💬Kleinunternehmerregelung under §19 UStG (annual turnover under €22,000).
These rules make managing a Freiberufler business significantly easier, especially for those just starting out.
3. Social security and insurance
Freiberufler are generally not required to pay statutory pension insurance 💬Rentenversicherung, though voluntary contributions are possible. However, certain regulated professions are obliged to join a professional chamber 💬Standeskammer and contribute to a compulsory pension scheme. Read more about typical insurances for the self-employed.
Professions with mandatory chamber membership include:
- Doctors
- Lawyers and notaries
- Tax consultants
- Architects
For artists and writers, the Artists’ Social Insurance Fund 💬Künstlersozialkasse (KSK) provides pension, health, and long-term care insurance.
If your profession does not qualify for the Künstlersozialkasse, you must choose between statutory health insurance 💬gesetzliche Krankenversicherung and private health insurance 💬private Krankenversicherung.
Accounting for Freiberufler in Germany
Liberal professionals enjoy very simple bookkeeping rules. Unlike many commercial traders, they don’t have to keep double-entry accounts or prepare a balance sheet.
Instead, they submit a profit and loss statement 💬Einnahmenüberschussrechnung (EÜR) once a year to the tax office. This document simply shows the difference between your income and your business expenses over the year.
If your annual income (including VAT) is below €22,000, the EÜR is part of your normal tax return 💬Steuererklärung. You only need to record what you’ve actually received or paid. The relevant data point is when you have received payment—rather than the date you created the corresponding invoice.
Example:
A self-employed interpreter earns €1,000 for a translation job. This counts as income.
If they spend €200 on office rent and €50 on travel, the taxable profit is €750.
Typical income and expenses include:
- Income: client invoices, service fees, royalties
- Expenses: office rent, equipment, insurance, and other running costs
In short, the EÜR lets you manage your accounting easily without needing formal bookkeeping or complex software—ideal for new entrepreneurs.
Conclusion
For anyone planning to work independently in Germany, understanding the Freiberufler status is essential. It offers flexibility, reduced bureaucracy, and lower taxes—but also demands personal responsibility and legal awareness. Whether you qualify depends on your profession and how you structure your work, so it’s always wise to confirm your status with the tax office before investing time and money in a new business.
