According to the law, freelancers are treated like self-employed. However, not every self-employed person is a freelancer, it depends on the activity carried out. It is not always that easy to decide whether a freelancer is involved; the individual case often has to be checked. Business start-ups should decide whether they want to work as a freelancer.
What are freelancers?
The freelance work is defined by the fact that they
- is not subject to the trade regulations
- requires special knowledge and skills
- represents a service occupation
- is carried out independently as a scientific, artistic, literary, educational or teaching activity.
If a person exercises a free profession, he is considered a freelancer. In addition to professional qualifications or creative talent, the activity includes the personal, responsible and professionally independent provision of services. There are differences between freelancers and traders. Because they do not pay any business tax and do not have to register a business. You don’t have to keep double-entry bookkeeping either , because creating an income-surplus-account is sufficient. The freelancer does not necessarily become a member of the Chamber of Commerce and Industry and can also set up a partnership with other freelancers.
Division of freelancers into groups
According to gradphysics, freelancers can be divided into three groups, with a distinction being made between catalog occupations, catalog-like occupations and occupations.
In the group of catalog professions, health professions include doctors, dentists, veterinarians, masseurs and physiotherapists as well as alternative practitioners, midwives and qualified psychologists. The catalog professions also include legal, tax and business advisory professions; this category includes lawyers, notaries, patent attorneys, auditors, tax consultants, tax agents, sworn auditors and advisory economists and business economists. Another group under the catalog professions are the scientific and technical professions, which include architects, experts, commercial chemists, surveyors and pilots. Cultural professions also fall under the catalog professions, they include journalists, interpreters, photo reporters, scientists, translators, teachers and educators, writers and artists.
Another group of freelancers are the catalog-like professions . They largely correspond to the catalog professions , but they require a higher level of training. A case-by-case check is not always carried out to determine whether the jobs are actually catalog-like. Catalog-like professions include photo designer, conductor, occupational therapist, actor, masseur, riding instructor, fashion designer and copywriter, but these are just a few examples.
The group of occupations includes scientific activities, artistic activities, literary activities, educational activities and teaching activities. In most cases, a case-by-case examination is carried out. The assignment to the individual groups is not always clearly possible, the boundaries are blurred. It is not always clear whether the person is a freelancer. According to the Income Tax Act, freelancers are those who work in a catalog, a catalog-like occupation or an occupation.
Liberal professions in numbers
The IFB (Institute for Liberal Professions) at the University of Erlangen regularly publishes statistics and research results relating to the liberal professions. Accordingly, there were 1,432,000 freelancers in Germany as of January 1st, 2019. This development has been documented by the IFB since January 1st, 1999. At that time, however, there were only 668,000 freelancers.
These freelancers were statistically and graphically divided into the following four main groups as of 01/01/2019:
- Technical and scientific liberal professions: 280,000 people (20%)
- Liberal cultural professions: 332,000 people (23%)
- Legal, economic and tax consultancy freelance professions: 399,000 people (28%)
- Independent health professions: 421,000 people (29%)
The delimitation of the liberal professions is always a problem and must be discussed on a case-by-case basis, preferably with a tax advisor.
As already mentioned, there are regular “catalog jobs” that are not subject to the trade regulations and are listed in § 18 EStG . These are, for example, the health professions (doctors, midwives, psychologists) or tax consultants, lawyers as well as engineers and artists or teachers.
The catalog-like professions were worked out by the IFB (Institute for Liberal Professions). These include, for example:
- Temporary and entertainment musicians, conductors
- Mountain guide
- Interior designer
- Actors, cameramen, make-up artists
- IT consultant
- Dance teacher
- Marketing consultant
- Market researcher
It is important here that the occupations or the status of a freelancer are not confused with that of a so-called freelancer . The final decision on the status of the professional group is ultimately made by the tax office. However, the tax advisor or a lawyer can clarify in advance whether your profession is one of them or not. After all, this also has an impact on whether you would otherwise have to register a business or have to consider further legal steps.
Features of activity as a freelancer
It is not always possible to clearly define whether a self-employed person is a freelancer or a trader. There are a few differences that can be used to fairly clearly define a freelancer.
He may have an academic degree or a higher education. When working as a freelancer, the creative part is very high. They often complete high-quality additional training in order to be able to carry out their work. In addition, they are the ones who work alone in their company in terms of content, while other employees work as temporary workers or assistants.
The source of income for freelancers is knowledge and experience at a high level. The activity is located in the areas of consulting, teaching, teaching and coaching. Freelancers have a special relationship of trust with their customers. For freelancers, the focus is on service and personal commitment; payment is made with fees. In contrast to freelancers, tradespeople sell products and provide a service in the form of mediation. You are engaged in the production of goods, the growth of the company is mainly through the use of capital. The tax office checks the individual case whether it is an activity as a freelancer. Anyone planning the path to self-employment can get advice from a lawyer or tax advisor.