If a person is self-employed, it is possible to infer a possible pseudo self-employment using the following assumption criteria. A person is bogus self-employed if at least three of the following criteria are met. The person is bogus self-employed if …
- … it does not regularly employ any employees subject to compulsory insurance whose wages are> 400 euros per month.
- … it works on a long-term basis and essentially only for one client (5/6 rule).
- … they carry out an activity that the client regularly allows other employees to carry out.
- … no typical entrepreneurial characteristics can be recognized.
- … they carry out an activity that is carried out on the basis of an employment relationship.
How can you avoid bogus self-employment?
Nobody deliberately runs the risk of being held accountable and punished as a bogus self-employed person. It is therefore advisable to set up the entire company right from the start in such a way that independence is clearly recognizable and demonstrable. Of course, at the beginning it can still happen that a self-employed person looking for an order initially gets stuck with just one client who repeatedly orders him. How did the deal bogus self can we introduce to you now on in a few tips.
5 tips to avoid bogus self-employment
There are several possibilities for this. However, we have put together 5 general tips below:
- Make inquiries or seek advice
It is important to protect yourself against suspicion right from the start. Tax advisors or lawyers can help to clarify whether or not there is a possible bogus self-employment. This is important because ignorance does not protect against punishment.
- Establishment of the workplace
As a self-employed person, you have to emphasize your freedom of choice and self-determination. The workplace must be designed in such a way that it emphasizes independence in terms of hardware and software as well as the spatial separation from the client.
- Concrete agreements when placing the order
Even when submitting the offer and negotiating the terms of the contract, one can be careful to clear up any misunderstandings. Because here not only the contractor, but also the client is affected by a possible penalty. More on that later.
- Contract review
The service or work contract that comes about when an order is placed must be carefully checked. Does it contain all the important points that guarantee the self-employed person his freedom of choice and his entrepreneurial risk? Are instruction obligations eliminated?
- Registration with the German Federal Pension Insurance
It is beneficial if the self-employed person applies for an exemption from compulsory insurance with the pension insurance company within the first three months of starting their work. For the first 3 years of self-employment. In case of doubt, this serves as a further indication of self-employment.
There are legal regulations for the clarification of independence, the review and also the penalties for offenses. Because several areas of law are affected here. These would be labor law on the one hand, but also social security and tax law.
Bogus self-employment in the law:
The labor law background of contracts is recorded in the BGB . For example, § 616a BGB regulates the aforementioned obligation to follow instructions. A self-employed person must not be bound by instructions and must be able to organize his work and working hours freely.
In SGB other relevant issues are regulated:
- 7 (1) SGB IV contains the definition of the employment relationship
- 5 (5) SGV V clarifies full-time self-employment.
- 2 SGB VI stipulates that these self-employed persons are subject to pension insurance.
- 7 (4) SGB IV defined five criteria for bogus self-employment from 1999 to 2003. With the amendment of the law in 2003, however, these were deleted. According to this, until the renewed reform and deletion without replacement in 2009, those who applied for a start-up grant would be refutably assessed as self-employed during the funding period.
In March 2017, the BSG (Federal Social Court) introduced the fee as a new criterion for true independence. In the present case it was about 40 – 41.50 €. The BSG also used binding instructions as an additional criterion.
Accordingly, occasionally necessary instructions and subject-related instructions are not considered critical. The third important point was the agreement of a fixed hourly fee. According to the BSG, this agreement does not necessarily apply to dependent employment.
The demarcation between the self-employed and the employees is largely based on the criteria that we have already set out in the table above.
Self-employed persons may not be workers-like persons or freelancers in an economically dependent relationship, and they may not be homeworkers or domestic workers.
Instead, the freelancers have to be self-employed and perform their work within the framework of a service contract in accordance with Section 611 of the German Civil Code (BGB). Freelancers are listed in Section 18 (1) No. 1 EStG , including, for example, doctors, architects, naturopaths, journalists, translators and tax consultants .
Incidentally, the self-employed does not necessarily have to have employees. He can also work alone, for example as a sales representative.
Employees work according to an employment contract and perform work that is bound by instructions and externally determined for their employer. It is economically dependent on the employer and integrated into its organization.