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Need some help getting the lay of the land? These resources can start you out right.
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Disclaimer: All tax or legal information here is general and freely available online. No individual advice can be offered and no guarantees of correctness or completeness are given. For personal advice, consult a licensed professional in the respective field.
Getting your taxes set up
ELSTER
The online portal of the German Finance Authority.
Tax ID (Steueridentifikationsnummer)
Your Tax ID is a permanent number, 11-digit number that follows you all your life in Germany. As a foreigner, you receive this automatically when you first register your residential address. If you don’t have a registered address, or are outside of the country, there is a form you can fill you out. Or use this handy online wizard to get help filling it out in English.
ELSTER account
ELSTER has a new registration process in 2025, so most online tutorials are out-of-date. The official video tutorial is here (in German).
As a freelancer or solo entrepreneur, create an account as a private person (“Als Privatperson”). For this, you’ll need your Tax ID and date of birth. You’ll create log-in details and get an email to verify your account with a code that you’ll need later. Save all this information.
Finally, you’ll decide how to identify yourself: via email using your German ID (for citizens) or residence permit chip card (if you have one) or via the post. Once you have received your email or letter in post, enter the codes from the first email and the second email/letter to finally log in.
Next you can choose between using the new ElsterSecure app or a “Certificate File”. If you choose the latter, you’ll be prompted to download this file to your hard drive. You’ll upload it again every time you want to log in using the details you saved.
Now you’re all set!
Tax Number
This number allows you register your business with the Finanzamt and start earning money as a freelancer. It is NOT the same as your Tax ID. It will change every time you move house (the first two digits identify your local Finanzamt) and you can end up with more than one under certain circumstances (e.g. you start more than one business). Your invoices must include this number (NOT your Tax ID!) or your VAT number.
If you’re still confused about the difference between a Tax ID, Tax Number, and VAT number check out this handy guide.
Fragebogen zur steuerlichen Erfassung
This form is how you register to get your Tax Number so you can start issuing invoices (and earning money!)
In ELSTER, go to the “Formulare und Leistungen” tab on the left. Under “Alle Formulare”, you get a search bar. In the search bar, enter “Fragebogen” and select “Fragebogen zur steuerlichen Erfassung für Einzelunternehmen“.
You can follow this step-by-step English guide to fill out this form (skip to Step 2, since Step 1 is outdated!).
Value-added tax (VAT)
Your VAT number allows you to apply VAT to your invoices. You can also put it on invoices in place of your Tax Number. It’s less personally identifiable in that, e.g., it doesn’t show where you live.
You can request your VAT number here.
Confused by VAT? Check out this handy explainer.
VAT outside of the EU
VAT does not apply to money earned outside of the EU. Do not include it in your invoices! Income earned outside of the EU does not count towards your status as a Kleinunternehmer (see below).
VAT in other EU countries
If you are earning income in another EU country, check on the circumstances in that country and invoice accordingly. If you are taking advantage of a “reverse-charge procedure“, you must include a sentence like this on your invoice:
“Der Rechnungsausweis erfolgt ohne Umsatzsteuer, da vorliegend der Wechsel der Steuerschuldnerschaft (Reverse-Charge-Verfahren) greift. Die Umsatzsteuer ist vom Leistungsempfänger anzumelden und abzuführen.”
Kleinunternehmerregelung
If you earn less than €25,000/year (as of 2025, previously €22,000) in eligible income, you are considered a “small business” (Kleinunternehmer) and do not have to apply VAT. This refers to your total earnings, NOT income after expenses. Income earned through employment or outside of the EU (no VAT possible) does not count towards this total.
Certain types of businesses you might work with also do not apply VAT, which means you do not invoice them for VAT. These include e.g. recognized educational institutions (Bildungsträger), among others. Check with your client to be sure.
If you are a Kleinunternehmer, you must include a sentence like this on your invoice:
“Als Kleinunternehmer im Sinne von § 19 Abs. 1 UStG wird keine Umsatzsteuer berechnet.”
If you earn more than €25,000 during the year, don’t worry! You won’t have to start applying VAT until the following year. You only have to start immediately if you earn over €100,000 (previously €50,000).