Glossary · Legal forms

Liberal professions (Freiberufler)

Also: Freiberufler, freie Berufe, freelance professional, self-employed professional

In short

Members of the liberal professions independently practise a liberal profession, for example as a doctor, lawyer, engineer or journalist, or in a scientific, artistic or teaching capacity. They do not register a trade and do not pay trade tax, as long as they do not work through a GmbH or UG.

Liberal professions (Freiberufler) explained

Sec. 18 (1) no. 1 EStG lists which activities are liberal professions, supplemented by "similar professions". Liberal professionals notify the tax office of their start directly using the tax registration questionnaire. Trade tax is linked to a commercial business (Sec. 2 (1) GewStG), and income from a liberal profession is not part of it. This changes with the legal form: the activity of a GmbH or UG is always and in full deemed to be a commercial business (Sec. 2 (2) GewStG). Those who join together usually choose a GbR or a partnership company (PartG). Be careful with mixed activities in a GbR: even a commercial share can make the entire activity commercial (Sec. 15 (3) no. 1 EStG).

Legal basisSec. 18 (1) no. 1 EStG, Sec. 2 GewStG, Sec. 15 (3) no. 1 EStG

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Related terms

GbR (civil law partnership)A GbR comes into existence as soon as at least two persons contractually undertake to pursue a common purpose, without a notary, register or minimum capital. All partners are personally liable for its debts, without limit and jointly and severally.GmbH (limited liability company)The GmbH is a corporation and legal entity formed by one or more persons with at least €25,000 share capital. As soon as it is entered in the commercial register, in principle only the company's assets are liable for its debts.Legal form (Rechtsform)The legal form is the legal framework of a business and determines liability, capital, formation effort, say in decisions and taxes. Common legal forms in Germany include the sole proprietorship, GbR, OHG, KG, GmbH, UG and AG.Partnership (Personengesellschaft)In a partnership, at least two partners join together, and the partnership depends on their personal involvement; examples are the GbR, OHG, KG and PartG. There is no minimum capital, but at least one partner is liable without limit.Partnership company (Partnerschaftsgesellschaft, PartG)The partnership company (PartG) is a company in which members of the liberal professions join together to practise their professions, entered in the Partnerschaftsregister. For professional errors, only the partner who handled the engagement is liable alongside the company.UG (haftungsbeschränkt)The UG (haftungsbeschränkt) is not a separate legal form, but a GmbH with less than €25,000 share capital, mathematically from €1, which must be paid in full in cash before the application. In return, it must put a quarter of its annual net profit into a reserve every year.

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