Not every contractor in Germany needs to be employed. Where there is a sufficient degree of autonomy between the worker and the client, it may be possible to demonstrate to the German authorities that the relationship is more a B2B than employment. There is no single determinant, but the features of the ties have to be taken in the round. Some of the indicators of self-employment are:
- The worker has more than one client
- The client does not exercise control over how they perform their work
- The client does not integrate the worker into their business
- The worker finds their work themselves, e.g. they may have their business card and website
- There is the possibility of substitution
- There is no expectation of future work nor the obligation to accept it
- The worker uses their tools
- There is a commercial risk other than the client failing
- The worker provides their insurance, including Professional Indemnity and Public Liability
A self-employed contractor, or Freiberufler, attends to their tax and VAT and must take our medical cover, which is a requirement for all workers in Germany. A Freiberufler does not have to contribute towards German social security, although they may opt to, for example, obtain medical cover and retirement benefits.
Further, a person in business on their account may claim all the expenses incurred in obtaining and maintaining their work for tax purposes: this is not the case for employed people.
A Freiberufler must register for VAT, account to the tax authorities for the VAT on their outputs, and reclaim the VAT on their vatable expenses.
At the end of the tax year, the Freuiberfler must complete and submit a tax return to the tax office (Finanzamt) and pay over any taxes due.
The AUGSIGHT GmbH Pay-as-you-Go (PAYG) Freiberufler service is unlike any other. Depending on how experienced and confident you are, you select the services you want AUGSIGHT to provide and can alter these at any time. AUGSIGHT’s cost calculator spreads the cost evenly over your contract duration. At the end of the assignment, you pay only for those services you chose and were delivered: we call this perfect transparency. Nothing could be fairer.
If you are interested in learning more about our services in Germany, please do not hesitate to contact us at info@augsight.de or by phone at +49 (6105) 4074016.