Side job of a managing director of a GmbH
June 25, 2013 | 25,00 EUR | answered by Steuerberater Thomas Textoris
Situation: A GmbH managing director who is not subject to mandatory pension insurance takes on a consulting mandate for an external company in addition to his managing director duties, for a scope of 6 hours per week. The fee is to be paid directly to the managing director, not to the GmbH.
Question 1: What type of trade does he need to register?
Question 2: How should the income from the consulting mandate be taxed?
Question 3: Will his exemption from mandatory pension insurance be revoked as a result?
Dear inquirer,
In the context of an initial consultation and your fee contribution, while observing the regulations of this forum, I would like to answer your question.
1: The question should actually be, does he need to register a business? Once a commercial activity is started, the business must be registered with the commercial office. However, a freelance activity does not need to be registered with the commercial office. Advisory services can be provided as a freelance activity. A more detailed definition of freelance activities can be found in § 18 EStG. This includes in particular legal and economic advisory professions: lawyers, notaries, auditors, tax consultants, consulting business and economists. Health professions, media and language professions, as well as technical and scientific professions also fall under freelancers. The aforementioned listing is also referred to as the so-called catalog professions. Only if all essential features for a catalog profession are met, you are engaging in a freelance activity; otherwise, your activity is classified as a commercial operation and must be registered as such.
In addition to the above-mentioned catalog professions, "similar professions" are also considered to be freelance activities (§ 18 para. 1 No. 1 EStG). A similar profession exists if:
• the profession corresponds to a specific catalog profession in all essential points,
• the taxpayer practicing the profession can prove a comparable level of education as the catalog profession,
• if a legally required permit for the catalog profession also has a comparable professional regulation for the similar profession.
2: As a freelancer, you generate income from freelance activity according to § 18 EStG. In a commercial operation, you generate income from commercial activity according to § 15 EStG. In both variants, the income is subject to income tax at your individual tax rate. With a commercial operation, you are also subject to trade tax (exemption amount 24,500 €). In general, you must also charge value added tax. There may be the option of the small business regulation (§ 19 UStG).
3: Exemption from pension insurance obligation is not revoked by this. Theoretically, however, you could be subject to pension insurance obligation with the income from advisory activities. This varies depending on the activity group. An overview can be found in § 2 sentence 1 SGB VI.
I hope I was able to provide you with an initial overview within the scope of your fee contribution.
Best regards,
Thomas Textoris
Tax consultant
