Filing your Taxes as a Freelancer in Germany

 How to File your Taxes as a Freelancer in Germany

 Learn how you can easily file taxes as a self-employed in Germany

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Filing taxes in Germany can be tricky, especially if you don’t speak German. Making a mistake could end up costing you a lot of money! As a freelancer in Germany, you are probably finding the German tax system too complicated to manage on your own. Doing your taxes as a freelancer is way more complicated than doing it as a regular employee.

Hiring a Steuerberater (German tax consultant) who can offer advice in English can be very expensive! You may not be able to afford it if you just arrived in Germany and do not have a steady income yet.

In this post, we will write about an affordable alternative to file your taxes and VAT to the authorities as a freelancer in Germany. We can recommend you an online & English-language tax tool for freelancers working in Germany. Keep reading this article to learn how you can file your taxes as a self-employed person in Germany. 

What is the online tax tool we are talking about?

The tax tool is called "Sorted" and was created to help freelancers in Germany deal with their taxes. Sorted is available in German and English. 

Why choose "Sorted" to do your taxes as a freelancer?

• This tax tool guides you through your registration process with your local Finanzamt: freelancer registration, tax number and VAT applications.
• It tracks all your expenses and invoices
• It files your income tax return (Steuererklärung)
• It files your VAT return (Umsatzsteuererklärung)
• It files your advance VAT declaration (Umsatzsteuer-Voranmeldung)
• It files your profit report
• It gives you access to certified tax consultants
• It is available in English
• No ELSTER account or certificate is needed. 

Click here to try out Sorted for FREE!

Who can use Sorted?

Sorted is a tool for German & non-German speaking freelancers and self-employed in Germany.

Freelancers (Freiberufler) & businesses with a single owner (Einzelunternehmern) and not registered as a corporation, partnership or limited liability company can use Sorted to do their freelancer taxes.

Note: In Germany, many independent academics (doctors, lawyers, IT specialists, and so on) are also designated as freelancers (Freiberufler).

How can I register as a freelancer in Germany?

If you are not yet a freelancer in Germany but want to become one, you can just sign up with Sorted to register officially yourself as a self-employed with the German tax authorities.

They provide you with a tax registration form in English and directly submit it online to your local Finanzamt once completed. This process is totally free.

If you are already a freelancer in Germany, then you can use Sorted for your bookkeeping, tax & VAT declarations.

Do I need to charge VAT?

In German, Value Added Tax (VAT) is called either Umsatzsteuer or Mehrwertsteuer (MwSt).

Value-Added Tax is the consumption tax throughout the European Union, levied on almost everything sold in the EU. Your customer’s location determines what VAT you need to charge.

The tax office relies on you to report and declare the Value Added Tax on a monthly or quarterly basis, and the only money you will be able to keep for yourself is your income, after-tax.

Exception: You may count as a “Small Trader” (in German: Kleinunternehmer) if your revenue for the whole first year is less than 17,550€, and less than 50,000€ for the next business year (estimation). In this case, you do not need to charge VAT to your customers.

How can I pay my taxes in Germany?

You can submit your tax declaration to the Finanzamt online through Sorted. 

Sorted helps you file your income tax return (Steuererklärung), VAT return (Umsatzsteuererklärung), profit report and advance VAT declaration (Umsatzsteuer-Voranmeldung); the whole process is in English and online.

How does it work?

Sorted submits your tax declaration directly to the Finanzamt through the official ELSTER interface.

Bear in mind that it might take a few weeks before the Finanzamt actually reviews your tax declaration and sends you a tax assessment via post.

How much does it cost to do my taxes with Sorted?

You can register as a freelancer online, invoice your clients, track income and expenses and connect your bank account for free.

You only have to pay if you book a consultation with a tax advisor or purchase an additional tax service (submission of your yearly tax reports, monthly or quarterly VAT declaration, etc).

Important: Once you start earning above a certain threshold, you will need to submit a monthly or quarterly VAT declaration to the tax authorities. This is the law! This could be done easily with the "Kleinunternehmer Plan" (for income lower than €22.000 per year) or the "Pro Plan" (for income above €22.000 per year). More details here.

In brief, if you want to do your freelancing taxes in Germany, we recommend you try out Sorted. Try out their Free "Starter Plan" first and register as a freelancer, then upgrade to their "Kleinunternehmer Plan" or "Pro Plan" whenever you need it. 

Try it out for free now!

Is there any alternative to Sorted?

If you also need a German bank account specifically designed for freelancers and want to combine it with a tax service, you should choose Kontist. Kontist is an advanced business bank account with automated bookkeeping in real-time, and a seamlessly integrated tax service.

Taxes, bookkeeping and banking under one roof! Kontist Tax Service organizes all your tax topics and your financial bookkeeping. Completely. They take care of your advance VAT payments, P&L, adjustment of advance payments based on your current income, tax declarations and much more. Besides, their proficient and experienced tax advisors advise you on all tax-related questions. More details here.

Unfortunately, they do not offer any online registration with the German tax authorities. So if you need to apply for a tax number and a VAT number to register as a freelancer, you will need to use the free registration service offered by Sorted.

Try it out for free now!