A business registration is required for full-time self-employed persons as well as for self-employed in part-time business. In order to become self-employed as a part-time job, the following new rules apply:
The procedure for registering a business changed with effect from January 1, 2021.
From this point in time, the responsible tax office must be informed electronically of the start of agricultural, forestry, commercial or freelance activity by taxpayers or their tax advisors without prior request by submitting a questionnaire for tax registration within one month of the start-up.
This can be done, for example, via "My ELSTER - the online tax office". ELSTER makes it possible to send tax data to the tax authorities without paper and free of charge, regardless of time and location application to initiate a registration process with a safe and completing individual ELSTER certificate. If company founders already have an ELSTER certificate, they can also use this to submit the questionnaire in question for tax registration.
If, on the other hand, the company founders do not yet have an ELSTER certificate, there is another option of promptly electronically sending the questionnaire for tax registration via the ELSTER portal. Using the so-called "ELSTER Light Certificate", all that is required is an e-mail and password. In addition, there is the option of converting the Light certificate into a full ELSTER certificate. You can register via ELSTER.
Before registering, also check whether the work you are doing is subject to certain requirements for example permits, trade approval, master craftsman obligations and so forth.
The combination of a full-time part-time job and a freelance part-time job is not uncommon. However, income in the principal occupation is usually low and the number of hours worked is low. So that you do not experience any nasty surprises and have to pay additional health insurance contributions, you should apply to the health insurance company for a status assessment procedure if you are legally insured.
It is quite possible that in this case, the statutory health insurance will decide that you are not self-employed as a part-time job and in this case you have to pay contributions for both your dependent employment and self-employment.
Salaried employees should inform the employer about the planned part-time self-employment. Even if the employment contract says otherwise, it's a formality, as long as you stick to the rules:
- You are not competing with your employer.
- Your full-time job does not suffer from secondary employment: You continue to appear reliably to work, are not overtired and remain committed and productive.
- You do not have access to funds or data from your employer.
While full-time entrepreneurs can receive a lot of subsidies and grants, the choice is much smaller if you become self-employed as a part-time job. Some start-up loans from the Kreditanstalt für Wiederaufbau (KfW) can also be used by part-time start-ups if full-time self-employment is sought in the long term. Part-time founders should not underestimate the capital requirements and should carefully check whether they can receive funding from the state, the state or their own community.
How do taxes work in these circumstances?
The income from your part-time self-employment, like your regular work income, is subject to income tax. If you set aside around 30% of the profit for tax payments, you will not be surprised by unexpectedly high back payments.
If you are eligible for VAT, you need to submit regular VAT returns to the tax office, which founders usually have to submit monthly for the first two years of operation.
Small business regulation
In order to relieve start-ups and small businesses, the state offers the small business regulation upon request. If you earned less than 22,000 euros in the previous year and less than 50,000 euros in the current year, you can use this rule. You will then not charge your customers any VAT and in return, you will not be able to deduct any input tax. If you are self-employed as a part-time job and the expected sales are manageable, the small business regulation can be an option. Since the choice of the small business regulation can be made dependent on different aspects, it is preferable to make this known prior to or as soon as registering your business.