What is more tax advantageous: 2 jobs as an employee or 1 as an employee and 1 as a freelancer?
May 24, 2012 | 25,00 EUR | answered by Dr. Yanqiong Bolik
I request – if possible very short-term – advice on the following matter:
My current full-time employment as an employee (5 days / 40 hours per week) will soon be transitioning to a part-time employment (3 days / 24 hours per week) by me.
On the two free days in the week, I will be engaging in a new / additional activity – either as an employee or a freelancer.
Which constellation – being employed at both employers or only being employed at one of them and pursuing the other activity as a freelancer – is more advantageous for me from a tax perspective?
I also request the relevant legal regulations to be mentioned. Thank you very much.
Dear inquirer,
Thank you for your inquiry, which I will gladly answer taking into account your input and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of the information can change the tax result.
From an income tax perspective, there is generally no significant difference between the two scenarios. As an employee, you earn income from employment (revenue minus deductible expenses = surplus). As a freelancer, you earn income from self-employment (business income minus business expenses = profit). Both the surplus and the profit are taken into account during income tax assessment.
From a value-added tax perspective, as a freelancer, you are generally considered an entrepreneur according to §2 UStG. If your sales are not tax exempt (§4 UStG) and the small business regulation (§19 UStG) does not apply, you have VAT obligations to consider and fulfill.
As a freelancer engaged in self-employment according to §18 EStG, you are not subject to trade tax. Therefore, there is no difference in this regard.
With regard to tax regulations, as a freelancer, you will have higher administrative effort due to ongoing reporting and retention obligations.
I hope my explanation has provided you with an overview and helped you in your decision-making process.
If you have any further questions, feel free to use the follow-up function.
Kind regards,
Dr. Yanqiong Bolik
Tax advisor
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 2132 1815
Email: info@zdbz.de
www.steuerberatung.zdbz.de
