We have been busy collecting questions again and in this video I would like to answer a few selected questions on tax issues in the field of self-employment. Hi, my name is Melchior from Kontist Steuerberatung and we get a whole series of questions. I've just picked a few questions for this video on the subject of self-employment and I would like to answer them now. The first question comes from Agatta Bozula and Agatta writes: "Great video!", Thank you very much for that, that's why I always read it out because I'm very happy about it, i.e. write that you like our videos, that always makes the whole team happy, "One question – if I want to become self-employed as an architect, should my work be understood as construction work? Basically, my tasks only concern planning, coordination and support, in that sense I would say that this is not construction work, or am I wrong there?” To explain the context of the question a bit, construction work is definitely a valid, relevant topic for VAT, namely there is the reverse charge procedure, what that is exactly, I'll explain that in this video, so have a look there if you don't know exactly what the reverse charge procedure is.

But the reverse charge procedure does not only exist in international business relationships, but sometimes also from German to German companies, i.e. domestic business relationships are sometimes affected by the reverse charge procedure, especially when it comes to construction work and Agatta would like to know right now whether her work as an architect falls under these construction works. And I can give you the all-clear in this area. Planning and monitoring work is expressly excluded in the tax law, i.e. in § 13b, i.e. your work is not construction work according to the Value Added Tax Act. The next question comes from Natasha Mararia: "What questions can I use to test a tax advisor whether he is the right specialist for the relevant field?" I think this question or the background to this question I have to explain first, and that is my basic advice, and of course I also explain this in some videos, that if you want to hire a tax consultant, you should first speak to this tax consultant free of charge so that you can get to know each other, so that you can develop a feeling for whether this is the right specialist for you.

It's not my concern that you work down a catalog of questions or ask any technical questions to this tax consultant, who then answers them. In case of doubt, they know a lot more about taxes than you do and you wouldn't be able to do anything with the answer and you wouldn't be able to check whether that was a good or bad answer. At this point, I'm more concerned with the fact that the tax consultant should understand your business model and, of course, understand the typical problems and issues in your business area. If you do affiliate marketing, for example, then there are of course big players, certain processes, etc. If you have to explain to a tax consultant what affiliate marketing actually is, then that is a fundamentally very bad sign, because then the tax consultant obviously has no idea about the whole business area and how is he supposed to actively support you if he doesn't understand the business model? That's why I can't give you a catalog of questions that you should ask your tax advisor now.

You should just think about what are the typical problem areas that you have in your self-employment, in your business model? And you should develop a feeling for whether your tax advisor knows anything about it, so that he can also advise you. Otherwise you end up paying the tax consultant a bill for a while at the very end by explaining your business model, and you should urgently avoid that. Ideally, you should always fall back on specialists. The next question comes from Eva Gerber and Eva writes: "If I don't need 450€ of power, but less, why do I need an employment contract?" And that is a very good question, because I understand this confusion around the topic of 450€ of power being noticed very often.

I would just split this question in two. The first question is about the employment contract and you should ideally always sign it if you have employees. Firstly because you then have something for your bookkeeping, you have proof on which basis you are now transferring money and your employee will also want to have an employment contract that regulates: When do you work? When is payment made? How much is paid? What activities etc.? The second question is the whole question of 450 € or less. A 450 € job is actually just the colloquial term for the mini-job relationship. You don't have to pay 450 € for a 450 € job, you can pay less.

450 € job or mini job is more the name for the very simple billing in this mini job relationship. You pay less tax and the entire social security tax return is a flat-rate and also easier for you as an employer, i.e. you have a lot of bureaucratic and financial relief in a mini-job relationship. But of course you can also just pay someone less, you are not obliged to pay that 450€, you can also pay someone 100€, 150€ or 200€ in a 450€ job, because that just means the type of contract and it does not mean that you really have to pay 450€. The next question comes from tombo 09 and tombo writes: "What if the business profit is less than 60,000 € per year, but you don't have to submit an income tax return due to the exemption?" That gets mixed up. Because there are two topics. The first topic is the type of profit determination, i.e.

The way you do accounting. There is the surplus income statement and the balancing and you as a trader have to, if you have a sustainable annual profit of more than two years, i.e. more than two years, then you have to draw up a balance sheet, then a surplus income statement is no longer sufficient. This is important for you as a trader to consider. I have already recorded an in-depth video on this whole topic of determining profits and the type of accounting, which I will put a link to in the top right-hand corner. But there is also another topic that you are broaching here, namely the obligation to submit an income tax return, and I hear and read that everywhere.

There is no exemption limit below which you do not have to file an income tax return. You must, if you are a tradesman, even if you are a freelancer, i.e. if you are self-employed in Germany, you always have to submit an income tax return. You are legally obliged to do so, there is no limit below which you do not have to file a tax return. This does not mean that you also have to pay income tax, but you will always have to file the declaration if you are self-employed. Shoko asked another question and the question came up in connection with the determination of profit, calculation of excess income, etc. and Shoko wrote: “What do I actually state as income now? I sell on Etsy. Do I now state the income after the fees have been deducted from Etsy?” And this problem, or this problem and this question, is actually faced by almost all self-employed people who earn their money on any platform, be it Etsy or Amazon, i.e.

Fulfillment by Amazon or Upwork or fiverr or you rent out any property on Airbnb, it doesn't matter, you usually get a payout and that payout amount is always minus the platform's fees. So, for example, you earn 1,000 € on Etsy, but Etsy transfers you only 800 € and 200 € were fees or advertising costs or whatever, so you get 800 € transferred and the question naturally arises: Do you book the 800 € now or what else? And that is very important, because in accounting there is a principle called the prohibition of offsetting. You may not offset income and expenses, even if someone else is doing it for you. This means that if Etsy sends you a statement and it says 1,000 € in sales minus 200 € in fees is 800 €, then you mustn’t post the 800 €, but you have to post the 1,000 € and you accept the 200 €, that is, what fees stayed with Etsy and post these 200€ as costs, as operating expenses in your accounting. Of course, this means that the bottom line is that you only have a profit of 800 € and you only have to pay tax on this 800 €, but it is important that you enter the entire turnover once in your accounts. This total turnover is decisive for certain design options that you have, e.g.

The small business regulation, which you can always use if your annual turnover was less than 22,000 € in the previous year and of course it’s about the total turnover and not just that amount paid to you by any platform. I hope I was able to help you a little with this video. If you still have a question, I strongly recommend that you write a comment under this video with your question and then you will also have the small chance to be part of one of our next videos with your question.

If you are now thinking: "I don't need a video, I need a tax advisor", then I have a good final tip for you, we are tax advisors, an online tax consultancy for freelancers and self-employed and we are happy to help you with your accounting, tax returns, etc. no matter what you need. All the information about our offer and how we can help you can be found by clicking here. Of course, you can also watch all of our other videos to get to know us a little first, e.g. this one or this one..

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