In Germany, the distinction between a freelancer and a self-employed individual is defined by law and has implications for how you operate and are taxed.
A freelancer is typically someone who offers services in a specific field and charges fees directly to clients. Freelancers often work independently, without employees, and generally operate under their personal name. Examples of freelancers include artists, writers, language teachers, and professionals such as doctors, engineers, auditors, interpreters, or architects. Their activities are listed under Article 18 of the Income Tax Act, which outlines specific professions that qualify for freelance status.
On the other hand, a self-employed individual is often a business owner or company founder. This category encompasses sole proprietors, as well as those who hold positions such as managing directors or legal representatives of partnerships or corporations. Self-employed individuals may operate under a company name and are more likely to employ staff. They might run a business that provides products or services on a larger scale compared to typical freelance work.
The final determination of whether you are classified as a freelancer or self-employed is made by the Tax Office when you register your activity and apply for a Steuernummer (tax number). This classification impacts your tax obligations and business operations in Germany.