Anyone who wants to become self-employed is often faces a crucial question: Will I be classified as a member of a liberal profession, or do I have to register a business?

Certain self-employed activities are classified as a “liberal profession”; all others require a business registration (Gewerbeanmeldung). Find out which category your planned activities officially fall into.

This article explains which activities are considered liberal professions and which are classified as business activities. It also explains the resulting legal and tax differences.

Who belongs to the liberal professions?

Members of liberal professions earn “income from self-employed work” and do not have to pay business tax (Gewerbesteuer). They can determine their profit using a net income statement (Einnahmen-Überschuss-Rechnung, or EÜR), regardless of the amount of their profit or revenue.

In Germany, the Income Tax Act (Einkommensteuergesetz, or EStG) defines whether an activity is classified as a liberal profession or as a business from a tax perspective.

Members of liberal professions perform activities listed in Section 18 of the Income Tax Act in the form of a catalog. For this reason, they are often referred to as “catalog professions.” These include, among others:

Healthcare professions: doctors, dentists, veterinarians, non-medical practitioners, physiotherapists, midwives and psychotherapists
Legal and business advisory professions: lawyers, certified public accountants, tax advisors, economists providing consulting services
Science professions: architects and engineers
Information-mediating and cultural professions: journalists, interpreters, translators, scientists, artists, writers, teachers and early childhood educators

The practice of a “similar profession” to those listed above may also be classified as liberal profession. The wording in the law is intentionally open to accommodate newly emerging fields of work and professional profiles. However, the requirements for classification as a liberal profession are strict, and an individual assessment is generally required. A university degree relevant to the activity is often necessary.

Get advice on classification as a liberal profession

The Institute for Liberal Professions answers questions regarding classification difficulties.
Startup Hotline 0911 23 565 28
Monday through Friday from 9:00 a.m. to 1:30 p.m.

The colloquial use of the term “freelance”

In everyday language, terms for self-employed work are often used in a non-specific way, which can lead to confusion.

Phrases such as “I work freelance” or “I work as a freelancer” are often used to express that someone works independently and is not employed by a company. This applies regardless of whether the activity is classified as a liberal profession or as a business activity.

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms. Please note: Self-employed people in Germany are

either business people [Gewerbetreibende]
or members of the liberal professions [Freie Berufe].

Who is classified as business?

All self-employed individuals who do not engage in self-employment as defined by the list of liberal professions are considered business people (Gewerbetreibende). In other words, anyone who does not fall into the category of a liberal profession is automatically classified as a business person.

When liberal professions and business activities are combined

If liberal professions and business activities are combined, there is a risk of “business contamination”. In that case, the tax office will classify all income earned through self-employment as business income. As a result, you will also have to pay business tax on your income that is actually derived from your liberal professions activities and will lose your status as a member of a liberal profession.

This happens particularly often when you offer additional services alongside your liberal profession work that are considered business activities. For example, if a freelance naturopath also sells dietary supplements, diet products, or other health products (business activity).

Avoiding business contamination

To avoid such business contamination, liberal profession and business activities must be clearly separated:

Separate accounting: Separate net income statements (Einnahmen-Überschuss-Rechnungen, or EÜR) should be mantained for each activity.
Tax separation: Both types of income – income from liberal profession self-employment (Freiberufler) and business income (Gewerbe) – must be reported separately on your tax return.
Notify the tax office: The tax office must be informed of both activities. It will verify whether they are indeed separate areas of activity and may then issue two different tax identification numbers.
Be aware of business tax obligations: Business tax (Gewerbesteuer) applies to the business part of your self-employment, rregardless of whether you also engage in liberal profession.

Advantages and disadvantages of being classified as a liberal profession or business

Advantages of liberal profession activities

Members of the liberal professions benefit from various advantages:

No business registration required: You register directly with the tax office.
No business tax rewuired
Simple accounting: A net income statement (EÜR) is always sufficient, regardless of the amount of profit or revenue levels.
No Chamber of Industry and Commerce (IHK) or Chamber of Crafts (HWK) membership fees: Mandatory membership in other professional associations may apply (for example, for architects, doctors, and attorneys).

Important: Remember that you are required to register with the relevant Social Accident Insurance Institution (Berufsgenossenschaft) and check whether your self-employment is subject to mandatory pension insurance contributions.

Registering a liberal profession activity:
Directly through the ELSTER portal with the Tax Office

You register a liberal profession self-employment directly with the tax office by completing the “Tax Assessment Questionnaire” (“Fragebogen zur steuerlichen Erfassung”) online through the ELSTER portal. The tax office will then issue you a tax number for your self-employment. You need this tax number to issue invoices.

The tax office often requests proof of professional qualifications, such as a completed university degree. To speed up the review process, you can upload these documents when registering.

To learn how two or more liberal profession members can register a civil-law partnership (Gesellschaft bürgerlichen Rechts, or GbR), see this FAQ: How to register a civil-law partnership?

Please note: Registering as a liberal profession with the tax office does not constitute official recognition of your liberal profession status. It frequently happens that registrations submitted by supposed liberal professions are accepted by the tax offices without further review. Those affected then just as frequently – but incorrectly – assume that their status as liberal professions has been officially recognized. During a tax audit, the Tax Office may classify the activity as a business, which can result in back payments of business tax.

FAQ: Where and how do I register my liberal profession self-employment?

Tax and legal framework for businesses (Gewerbe)

All self-employed individuals who do not fall into one of the categories of liberal professions are automatically classified as businesses (Gewerbe). This has the following consequences:

Business registration is required and egistration with the tax office then follows in a second step.
Business tax becomes due once annual profits exceed the tax-free allowance of 24,500 euros.
Double-entry bookkeeping may be required, depending on the legal form or the amount of revenue or profit.
Mandatory membership in the Chamber of Industry and Commerce (IHK), the Chamber of Crafts (HWK), or both chambers.
Applies to all self-employed individuals: Remember that you are required to register with the relevant Social Accident Insurance Institution (Berufsgenossenschaft) and check whether your self-employment is subject to mandatory pension insurance contributions.

Registering a business (Gewerbe) in two steps
First with the business licence office, then with the Tax Office

Registering a business self-employed activity is a two-step process.

1. Registering with the business licence office (Gewerbeamt)

In Munich, you can register a business directly online: Online Business Registration Munich. To register online, you need a BayernID account. You only need to create a username and password; an online ID card or a BundID is not required.

In Germany, everyone is essentially free to register a business. However, some business activities require a permit or are subject to regulatory supervision. For these activities, you need to submit special documents or a permit to register.

For business in the skilled crafts sector that require a license (zulassungspflichtige Gewerbe im Handwerk), you’ll need a license (Handwerkskarte) from the Chamber of Skilled Crafts. In addition, there are crafts and craft-like activities that do not require authorization, as well as activities that are not classified as crafts at all.

2. Registration With the Tax Office

As the second step, you must also register your business online with the tax office by completing the “Tax Assessment Questionnaire” in the ELSTER portal. The tax office will then issue you a tax number for your self-employed activity. You need this tax number to issue invoices.

FAQ: Where and how do I register my business?

Consultation and support from the Munich Startup Office

Whether in full-time or side business – this is how the Munich Startup Office supports you:

You can clarify individual questions immediately:

Contact

E-Mail: start@muenchen.de (with callback service)
Phone: Monday to Thursday from 2 PM to 5 PM at 089 233 721759.

The Munich Startup Office is here for you and supports you on your way to self-employment.

Selbstständigkeit.