Field help: (2018) Profits are determined according to

Select here how the profit for your self-employed occupation is determined:

• Net income method (sect. 4 para. 3 of the Income Tax Act (EStG)): With the net income method (EÜR), the profit is calculated by comparing income and expenditure. This type of profit calculation is suitable for smaller businesses.
• Balance sheet (sect. 4 para. 1 or 5 of the Income Tax Act (EStG)): Accounting is considerably more complex, since an inventory must be carried out and a balance sheet (comparison of assets and liabilities) and a profit and loss account must be prepared at the end of the year.