Freelancer
November 16, 2011 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Dear Sir or Madam,
I have been offered a freelance position with an hourly rate of 25 euros, as I am not familiar with the income tax law for freelancers, I am turning to you. My question is: how much tax do I have to pay? If I were to receive 4000 euros gross monthly (or 48000 per year) from my client (or employer) and what is coming towards me? Apart from health insurance and private pension provision.
I am a PhD scientist (37 years old), tax class 1 and have no children.
Thank you in advance.
Best regards
Dear inquirer,
thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your situation in a preliminary consultation as follows:
In principle, you must subject your income to income tax. You determine this income by comparing your business income to your business expenses according to § 4 para. 3 EStG. I cannot assess how high your business expenses are from a distance, you will need to discuss this in detail with a tax advisor. Therefore, I cannot provide you with the amount of the tax burden.
Your activity is likely subject to value added tax in Germany, the standard rate is 19%, meaning that from 4000 euros gross you must remit the VAT of 19% included to the tax office, reduced by the input tax from the invoices issued for your activity, to the tax office on a monthly basis for the first year. Here too, you should seek detailed advice from a tax advisor, as I cannot assess from a distance whether and to what extent your activity is subject to VAT.
You must either voluntarily or privately insure yourself for health insurance and also provide for your private pension.
Furthermore, you must check whether you are actually engaged in self-employment. Since you are only working for one client, you may be considered falsely self-employed or as having an employee-like status, which could lead to social security and pension insurance obligations. Here too, you should seek detailed advice from a tax advisor or lawyer.
The issue is very complex!!
I hope that, considering your efforts, I have been able to provide you with insight into the issue.
Best regards,
Ulrich Stiller
Tax consultant/Diploma in Business Administration
