Freelancer vs. trader (German tax status)

The distinction between Freiberufler (freelance professional) and Gewerbetreibender (trader) has considerable tax and bureaucratic consequences in Germany.

Freelance professional:

• Who: doctors, lawyers, architects, engineers, journalists, programmers, designers, artists, translators
• Advantages: no trade registration needed, no trade tax, no compulsory Chamber of Commerce membership, simple bookkeeping (EÜR) regardless of turnover
• Registration: directly with the tax office (tax registration questionnaire)

Trader:

• Who: retailers, restaurateurs, craftspeople, online shop operators, estate agents
• Obligations: trade registration (€15–65), Chamber of Commerce/Crafts membership (compulsory!), trade tax from approx. €24,500 profit, balance-sheet accounting from €800,000 turnover
• Registration: at your town's trade office

Who decides? The tax office! Some professions are borderline cases (e.g. IT consultant: freelancer or trader?). If in doubt: ask a tax adviser.