What is the difference between traders and freelancers with regard to Form EÜR?

The distinction between tradespeople and freelancers is particularly important with regard to the income surplus calculation:

While tradespeople may only use the income surplus calculation if they do not exceed certain turnover and profit limits, freelancers may always use it, regardless of the amount of turnover and profit.

Strictly speaking, this refers not only to freelancers but to all individuals engaged in self-employment according to § 18 EStG.

Important is the question: Who is a freelancer and who engages in other self-employment?

Freelancers

A freelancer is someone who works independently and is self-responsible, practising a specific professional activity listed in § 18 para. 1 EStG. Freelance professions require an activity that does not necessarily require a university degree. It only needs to be a scientifically based education. This includes self-study or knowledge acquired through professional experience. The knowledge must be equivalent to a university degree.

(1) Freelancers are individuals who perform a specific activity (§ 18 para. 1 no. 1 EStG), namely a

• scientific, artistic, literary, teaching or educational activity.

(2) Freelancers are also individuals who practise a specific listed profession explicitly mentioned in the Income Tax Act (§ 18 para. 1 no. 1 EStG):

• Medical professions: doctors, dentists, alternative practitioners, dental technicians, physiotherapists, nurses, hygiene specialists.
• Legal and business consulting professions: lawyers, notaries, patent attorneys, auditors, tax consultants, consulting economists and business administrators, sworn accountants, tax agents.
• Technical and scientific professions: surveyors, engineers, architects, commercial chemists, pilots.
• Media professions: journalists, photojournalists, interpreters, translators.

(3) Freelancers can also be individuals who practise a similar profession comparable to the listed professions in terms of activity and training. The list of freelance professions in § 18 para. 1 no. 1 EStG is not exhaustive. It is important that the activity is carried out in a leading and self-responsible manner based on personal expertise. This applies, for example, to the following professions:

• Geriatric nurses, dieticians, occupational therapists, podiatrists, speech therapists, orthoptists, medical pedicurists, state-certified masseurs and therapeutic masseurs, medical bath attendants, paramedics, dental practitioners, midwives, psychological psychotherapists, child and adolescent psychotherapists, IT consultants, business consultants.
• Software engineering, work as a network or software administrator and supporter (BFH rulings of 22.9.2009, VIII R 31/07, VIII R 63/06, VIII R 79/06).

Activities that do not qualify as freelance work and do not constitute a business operation fall under other self-employment. A characteristic is also the personal work performance. However, other self-employment is usually carried out occasionally and only exceptionally on a sustainable basis (§ 18 para. 1 no. 3 EStG):

• Executors,
• asset managers,
• supervisory boards,
• property managers,
• insolvency administrators,
• trustees,
• guardians,
• estate administrators,
• arbitrators,
• interviewers for state statistical offices,
• childminders,
• volunteer mayors.

The distinction between business and self-employment is often difficult, as freelance work also generally involves the intention to earn. Many activities therefore fall under both the characteristics of freelance work and those of a business. In these cases, the decisive criterion is the intellectual, creative work that is the focus of freelance work.