Everything you need to know when starting a Gewerbe (trade)

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Want to start a Gewerbe (business/trade)? Welcome to the self-employed club where you’ll get to experience a lot of new things!

This includes the process of registering your Gewerbe. On this page, you will find all the information you need to register your Gewerbe.

Here’s what to expect:

• What is a Gewerbe?
• Freiberufler or Gewerbe - which one am I?
  • Can I be a Freiberufler and a Gewerbetreibender at the same time?
• When do I have to register a Gewerbe?
• What is a Kleingewerbe (small business/trade)?
• How do I establish a Gewerbe?
  • The trade license (Gewerbeschein) and how much it costs
  • The fiscal trade registration
  • IHK membership
• Trade tax (Gewerbesteuer)
• What happens after I register a Gewerbe?

What is a Gewerbe?

A Gewerbe is a form of self-employment. It is often translated to trade or business in English. The legal definition is as follows:

Definition of Gewerbe

A Gewerbe is any permitted, independent, externally recognisable, profit-oriented and permanent activity, with the exception of primary production, liberal professions, the management of one's own assets and artistic and scientific activities.

If you want to become self-employed and are not pursuing a liberal profession or an artistic or scientific occupation, you have to register a Gewerbe.

Examples of businesses that are classified as Gewerbe

The following activities are classic examples of Gewerbe:

• Driving schools
• Restaurants/taverns
• Amusement arcades
• Livestock trade
• Collection agencies
• Self-employed accounting assistants
• Brokers and agents for financial services and insurance
• Passenger and freight transportation
• Activities in the property protection/surveillance sector

Freiberufler or Gewerbe – which one am I?

You have different obligations depending on whether you are considered a Freiberufler:in (freelancer in a liberal profession) or a Gewerbetreibende:r (freelancer who has a registered business). Freiberufler only have to fill out the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) and can automatically work as self-employed professionals once they have received their tax number.

Gewerbetreibende, on the other hand, must additionally register with their local trade office (Gewerbeamt) and pay trade tax (Gewerbesteuer) on an ongoing basis.

Therefore, one of the most important tasks before registering as self-employed (selbstständig) is to clearly establish whether the work you are doing is classified as a liberal profession or commercial in nature.

➡️Not sure which category you fall into? Take our quiz to find out!

Can I be a Freiberufler and a Gewerbetreibende at the same time?

If your freelance work encompasses multiple different activities, you may be considered both a Freiberufler and a Gewerbetreibende.

In this case, however, you must fill out a declaration for each line of work that you do. This is because you can only declare one job on the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung).

It is possible that the tax office (Finanzamt) will assign an additional tax number (Steuernummer) for your other professional activities. If the work you are doing is very similar or somehow related to your profession, it is possible to do both under one tax number.

➡️ You can read more about being both a Freiberufler and a Gewerbetreibender in this article.

When do you have to register a Gewerbe?

The trade regulations (Gewerbeordnung) specify when you should register a Gewerbe. You must register it as soon as

• ... you start a commercial activity.
• ... you take over an already existing Gewerbe.
• ... you start a new branch office.

In these cases, you are required to register with your local trade office (Gewerbeamt) and complete the process for registering your business (Gewerbeanmeldung).

Generally speaking, it is best to register your business before you start working as a self-employed professional. This way you can get started with your business once you receive your tax number.

What is a Kleingewerbe (small business)?

The term “Kleingewerbe” (small business/trade) originates from trade law and refers to a specific legal structure. Sole proprietors and civil law partnerships (Gesellschaft bürgerlichen Rechts (GbR)) are automatically considered Kleingewerbe.

This comes with some advantages because you do not have to prepare balance sheets and can therefore forgo double-entry bookkeeping. Instead, you’ll be able to use the much simpler and less complex income surplus statement (Einnahmenüberschussrechnung (EÜR)).

Once your annual turnover reaches €600,000 or your profit reaches more than €60,000, you will have to utilize commercial bookkeeping and accounting.

Keep in mind: Kleingewerbe and Kleinunternehmer (small business owner) are not the same thing. The small business regulation (Kleinunternehmerregelung) originates from the sales tax law and exempts both Gewerbetreibende and Freiberufler from having to pay sales tax. This means that if you have a Kleingewerbe , you can also be a Kleinunternehmer (small business owner), but not every Kleinunternehmer has a Kleingewerbe.

➡️Kleinunternehmer guide: Everything you need to know about the small business regulation

How do I start a Gewerbe?

To start a Gewerbe, you must register it with your local trade office (Gewerbeamt). Depending on where you live, you may need to make a personal appointment. It may also be possible to register your Gewerbe online. It is best to search for the nearest trade office in your city, for example “Gewerbeamt Berlin”. You can find out more about the registration process on the website from your local trade office.

Keep in mind: The trade office responsible for you depends on your company’s address not your private address. If you live in Potsdam, for example, but operate a business in Berlin, you must register your business with the Gewerbeamt in Berlin.

To register your Gewerbe, you will need a valid ID or passport, as well as other documents such as a police clearance certificate (polizeiliches Führungszeugnis) or a certificate from the health department (Gesundheitsamt). You can read more about which documents are important for the registration on the website of your trade office (Gewerbeamt).

There are three essential steps to registering a Gewerbe:

1. You apply for your Gewerbeschein (trade license).

2. You fill in the Fragebogen zur steuerlichen Erfassung (tax registration questionnaire).

3. You automatically become an IHK member.

1. Apply for a Gewerbeschein (trade license)

To register your business, you must apply for a Gewerbeschein. This is a document that officially confirms that you’ve registered your Gewerbe. To do this, you must fill out the general registration form (Gewerbeanmeldung).

The trade licensing office (Gewerbeamt) then informs the tax office (Finanzamt) and the Chamber of Industry and Commerce (Industrie- und Handelskammer (IHK)) about your trade registration.

➡️ Here’s how to apply for a Gewerbeschein (trade license).

How much does a Gewerbeschein (trade license) cost?

A Gewerbeschein can cost anywhere between €20-€70, depending on the location. If you lose your Gewerbeschein, you can have another one printed out by the trade office. There is usually a small fee for this.

2. Fragebogen zur steuerlichen Erfassung (Tax registration questionnaire)

The tax office (Finanzamt) will then ask you to submit the tax registration questionnaire. However, you can also fill it out on your own, which may also have the added benefit of shortening the time you spend waiting at different government agencies.

➡️Here you can fill out the Fragebogen zur steuerlichen Erfassung (tax registration questionnaire) online.

3. IHK membership

After you have completed the steps above, you will be contacted by the Industrie- und Handelskammer (IHK) (Chamber of Industry and Commerce (CCI)) with information about your new compulsory membership, which involves regular membership fees.

The amount you will need to pay depends on where your IHK is located. However, there are two exceptions for paying membership fees . These are:

• Companies that are not registered in the Handelsregister (commercial register) and whose annual revenue is less than €5,200
• Startups that are not registered in the Handelsregister . Such startups are exempt from the basic fee for the first 2 years and from the IHK contribution for the first 4 years. As a rule, annual revenue must not exceed €25,000.

There are several benefits to being a member of the IHK: The IHK gives its members free advice on current issues relating to economic policy as well as various training seminars. You can find out what else the IHK offers on the website of your IHK branch.

Gewerbesteuer (trade tax)

If you operate a Gewerbe, then you have to pay Gewerbesteuer (trade tax) in addition to income tax (Einkommensteuer) and sales tax (Umsatzsteuer).

Trade tax is calculated according to the assessment rate (Hebesatz), which varies from municipality to municipality. How much you pay depends on where your business is located.

Good to know: There is also a tax allowance for Gewerbesteuer. You only have to pay it if your annual profit exceeds €24,500.

💡With Accountable you can take care of your Gewerbesteuer in just a few steps! Try out our software for free!

I’ve registered my Gewerbe – what happens now?

Congratulations! You are now officially self-employed and can fully devote yourself to your business. With your Gewerbe registered, you can now take care of all your tax matters like a pro with our free app.

Accountable is your companion for all your tax needs, whether it’s digitally saving receipts and invoices with our simple photo recognition feature or submitting Umsatzsteuervoranmeldungen (advance VAT returns) with just one click.

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Author - Markus Thomas Boldt

Markus is an experienced tax advisor partner at Accountable, where he plays a crucial role in supporting and consulting the company’s financial and tax strategies.

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