Freelancer or self-employed?
June 27, 2011 | 40,00 EUR | answered by StB Manuela Ponikwar
Good day,
I would like to work as a life counselor for pastoral care and family counseling starting from 01.09.2011. I am currently undergoing training to become a systemic counselor and previously worked as a commercial manager in a medium-sized company for 20 years. Can I establish myself as a freelancer and do I necessarily need to obtain a trade license? Please provide information with legal sources.
Kind regards
Dear client,
Thank you for your inquiry, which I would like to answer in the context of an initial consultation taking into account the appropriate fee as follows:
Unfortunately, there are no legal sources for the differentiation between freelance and commercial activities. In addition to the definition in the law with professional groups and catalog professions, there is only the case law of the Federal Fiscal Court (BFH) and the resulting commentary in the literature, which often discusses the classification of income.
§ 18 para. 1 no. 1 EStG lists the professional groups that earn income from freelance activities through self-employment.
However, belonging to one of the professional groups alone is not sufficient, the actual activity must be of a freelance nature. It must be typical for the mentioned catalog profession, i.e., characterizing in a special way and reserved for the catalog profession.
The professional groups are scientific, artistic, literary, teaching, or educational activities. Unfortunately, based on the commentary, you are probably not classified here. Especially the potentially related educational area is excluded:
Behavioral trainers and psychological counselors regularly do not perform educational activities, as they not only impart knowledge and skills, but also advise their subjects with the aim of analyzing problem situations and conflict situations and conveying strategies for their resolution (cf. FG Cologne v. 23.3.1998, 3 K 7575/96; BFH v. 2.2.2000, XI R 38/98, BFH/NV 2000, 839: "Hypnosis Therapy").
Another BFH judgment:
Consulting activities aimed at solving problems in a specific area of interpersonal relationships are not educational within the meaning of § 18 para.1 no. 1 EStG. (BFH judgment of 11.06.1997 - XI R 2/95)
In this respect, only the additional examination of the catalog professions or similar professions remains.
If healing or health care professions are not listed as catalog professions, such a profession is similar to one of the catalog professions mentioned in § 18 para. 1 no. 1 sentence 2 EStG if the typical image of the catalog profession with its essential characteristics is comparable to the overall picture of the profession under consideration.
This includes the comparability of the activity performed according to its distinguishing characteristics, the comparability of the training, and the comparability of the conditions to which the law ties the exercise of the profession being compared.
If necessary permits of the catalog professions are missing, it can be proven by an expert opinion whether the training, permission, and activity of the taxpayer are comparable to the requirements.
For example, psychotherapeutic activity; this is a medical activity when carried out by a doctor. According to the tax authorities, the exercise of this activity without medical training is similar to medical activity if the taxpayer has completed a university degree in psychology and additional training at a psychotherapeutic institute. Cf. BFH v. 20.6.2006, XI B 2/06, BFH/NV 2006, 1831.
In conclusion, I suspect that you will have difficulty qualifying your activity as freelance due to a lack of therapeutic-professional background (i.e., no university degree in psychology, sociology, etc.).
You only have protection of trust if the tax office initially accepts the activity as freelance and then wants to change the classification, if the question of the qualification of the income was previously disputed (BFH decision of 18.12.2002 - XI B 150/00 (NV)). In this regard, it is advisable to have an open discussion and document the argumentation with the tax office. I recommend consulting a tax advisor for this.
By the way (as an additional note), the qualification of income by the tax office is completely independent of the trade office. Even with a trade license, your income can be considered freelance.
I hope this information is helpful to you.
Best regards,
Manuela Ponikwar
Tax advisor
www.ponikwar.de
