Outsourcing of services by freelancers
May 14, 2012 | 45,00 EUR | answered by Andreas Schupp
A translator A. (freelancer within the meaning of § 18 (1) no. 1 EStG) has his translations proofread by a second translator B as needed (i.e. not regularly). B invoices A. for his services. A. does not make a profit from this, but includes the price for this additional service in the final price to the customer.
Does such a transaction constitute a commercial activity? Does translator A. have to pay trade tax in this case? If not, under what circumstances or from what amount would it be the case?
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into consideration your input and the rules of this platform.
Please note that my explanations are based on the situation you have presented, and that any modifications or ambiguities in the information given can affect the tax correct result.
Please be aware that for professional reasons, I am unable to address legal questions.
As a translator, you generate freelance income according to § 18 (1) EStG.
The occasional involvement of a colleague to review translations does not trigger commercial activity. This is because Translator B is working for Translator A or on behalf of Translator A and not directly for the end customer.
According to § 18 (1) No. 1 sentence 3, a self-employed person also carries out freelance work if they make use of professionally qualified workers (including subcontractors, see note 15.6 EStH keyword: "Assistance from other persons" as confirmed by the Federal Fiscal Court on 23.05.1984, 20.12.2000, and 01.02.1990).
The occasional use of a colleague does not contradict freelance work, especially considering the above notes and judgments, as the professional (Translator A) has also worked independently in each case.
I hope that my explanations have been helpful to you. If there are still uncertainties, please use the option to ask further questions.
Best regards,
Andreas Schupp
TAX CONSULTANT
