Taxes and visas: 3 golden rules for freelancers in Germany

A lot of freelancers in Germany are, well… expats! Not only does this mean that many have to go through the visa process, but also that interactions with the tax office can be more complicated, especially if you don’t speak the language. Kontist give their three golden rules for navigating your way through taxes and visas as a freelancer in Germany.

Germany has opened its arms to talent from abroad by offering lucrative entrepreneurship opportunities and facilitating the establishment and growth of young businesses. What this means, however, is that expats from outside the EU who take advantage of these opportunities will have to go through the visa process to come to Germany - and will have lots of paperwork to keep on top of, in order to keep their freelancer status. 

While the tax office (Finanzamt) and the foreigners’ office (Ausländerbehörde) are not strictly “linked”, there are some crossovers. Here’s some golden rules to keep in mind to make sure your interactions with these authorities are as stress-free as possible.   

1. Keep your books immaculate

All income from self-employed sources must be declared. No ifs, ands, or buts. So keep an accurate and up-to-date record of all income you’ve received from self-employment.

On the other hand, Germany is quite generous when it comes to deductions for the self-employed. Save every receipt: phone bill (landline and mobile), every restaurant bill (make sure it’s a Bewirtungsbeleg with the proper form on it!), your bike or car repair bills, your U-Bahn receipts, taxi receipts, plane tickets, invoices for “work-related” books and magazines, computers, software, and so on. 

The point is - make sure your reporting is accurate and timely, and utilises every benefit and option available to you. This also means you will be well-prepared to submit your taxes - which is where all of this meticulous bookkeeping really comes into its own, and you’ll thank yourself for being so organised! Your immigration officer may also ask to see these records. 

2. Save records of everything

There is no formally established standard as to what an immigration officer can ask an applicant to provide when it comes to renewing their visa request. However, you can anticipate that, in all likelihood, they will ask for some of your financial records.

And what’s the easiest way to find these records? Keeping them accurate and immaculate. This could also include summaries for VAT or other important monthly or regular tax activities. Using your historical financial records is a fantastic way to justify your future prospects. There are lots of great tools available on the internet and elsewhere that can help you stay on top of your books and record keeping. 

3. Keep evidence, and proof, and letters, and evidence - just in case! 

We can’t stress this enough. When you have received a summary of your payments to the tax office - make a copy and keep it with your visa paperwork. Any single person who works on your business, be it your tax agent or casual bookkeeper or a business advisor, or any person who can provide evidence of their services - make sure you get a record of this.

When you receive letters from the tax office that could constitute forecasted income - for example, in the form of tax prepayments, be sure to make a copy and file it away. When it comes to your visa appointment, all of this paperwork will only strengthen your case. 

By keeping on top of all of the above points, you will be doing what is expected of you: keeping a record of all the information provided to you by both the tax office and the foreigners’ office, which each office will expect to see. In this way, you can keep your interactions with both offices as simple as possible!

Would you prefer not to deal with all of this on your own? The Kontist Tax Service, an all-in-one business service offered by Kontist Steuerberatung, organises all of your bookkeeping, taxes and communication with the tax office for you.