| Pages in topic: < [1 2] | Two-edged business offer Thread poster: Astrid Elke Witte
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Aleksandr Okunev (X)
Local time: 12:17
English to Russian
| I would never go this way. | Jul 24, 2006 |
For 17 reasons.
Please, don't do it.
Cheers
a.O.
| | | | | This is exactly... | Jul 25, 2006 |
cbolton wrote: Astrid Elke Johnson wrote:
However, this would, according to them, be compensated for by the benefit of getting 30% extra as an individual freelancer. At least 70% of the work is work that I do as an individual.
then why not keep things the way they are? They're saying your income won't change. So why do they want to change the current setup? Unless they have something else in mind. I wouldn't do it. Stand your ground. They're bluffing. Most importantly, don't let it undermine your self-confidence. Because it really does sound like a bluff! FWIW, Catherine
what I think, almost word by word!!!
Good luck Astrid, and above all: good life!
Andres
| | | | RobinB 
United States
Local time: 04:17
German to English
| Be careful of tax position | Jul 25, 2006 |
Astrid,
I suggest that you take a look at your tax position. I *assume* that you are a Freiberufler(in) here in Germany, with all the benefits that brings (no Gewerbe, no Gewerbesteuer, no compulsory IHK membership, and so on). If you're not a Freiberufler(in), then the rest of what I write here can, of course, be safely ignored!
One of the drawbacks of having this Freiberufler status, though, is that there are certain things you *can't* do because they are classed as b... See more Astrid,
I suggest that you take a look at your tax position. I *assume* that you are a Freiberufler(in) here in Germany, with all the benefits that brings (no Gewerbe, no Gewerbesteuer, no compulsory IHK membership, and so on). If you're not a Freiberufler(in), then the rest of what I write here can, of course, be safely ignored!
One of the drawbacks of having this Freiberufler status, though, is that there are certain things you *can't* do because they are classed as being "gewerblich". These include things like publishing, organising conferences/seminars, and *agency business*.
Many freelances with Freiberufler status outsource quite regularly (but on an ad hoc basis), essentially because they can't themselves satisfy customer demand. Or sometimes because a longstanding customer wants a translation in "the other direction". According to our StB (very knowledgeable in matters relating to Freiberufler), this will generally be considered OK for tax purposes as long as it doesn't account for more than 20-25% of total revenue and doesn't form part of your permanent business strategy.
From your comments, though, I gather that you also work in "the capacity of an agency, processing translations in other language pairs, as well as offering other services". In other words, you have specifically structured your business to offer services that are classified as "gewerblich".
Of course, if you have a separate registered business for these activities, it's not a problem. But if you are conducting these activities under a Freiberufler banner, and if you suffer the indignity of a tax audit, you risk having your entire revenue from day one classed as "gewerblich". Doesn't mean that you'll automatically have to pay arrears of Gewerbesteuer, of course, as that will depend on the level of your taxable income. At the very least, though, you'd be caned for IHK contributions going all the way back, plus you'd have to refile all your tax returns, which could prove costly. And there would still be a chance of an unpleasant fine.
Don't want to worry you unnecessarily, though.
Robin
PS: Impressum seems to be missing on your website... ▲ Collapse
| | | | Astrid Elke Witte
Germany
Local time: 11:17
Member (2002)
German to English
+ ...
TOPIC STARTER | Status of Freiberufler | Jul 25, 2006 |
Firstly, thanks to everyone for your advice.
Robin, thank you for bringing up this matter about what a Freiberufler can and cannot do. I suppose I really knew that an "official" translation agency with premises, etc. is a "Gewerbe", but I had never considered that too many agency activities, alongside being a freelancer, could make me a Gewerbe.
I have simply been trying to adapt to customer demand as I go along, and this particular customer has been requesting various ... See more Firstly, thanks to everyone for your advice.
Robin, thank you for bringing up this matter about what a Freiberufler can and cannot do. I suppose I really knew that an "official" translation agency with premises, etc. is a "Gewerbe", but I had never considered that too many agency activities, alongside being a freelancer, could make me a Gewerbe.
I have simply been trying to adapt to customer demand as I go along, and this particular customer has been requesting various types of service normally offered by an agency rather than a freelancer, over the past few months in particular.
I will bear your comments in mind and ask my own Steuerberater about it as well.
Best regards,
Astrid ▲ Collapse
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RobinB
United States
Local time: 04:17
German to English
| Getting advice from your StB | Jul 25, 2006 |
Astrid Elke Johnson wrote:
I will bear your comments in mind and ask my own Steuerberater about it as well.
That's the best way forward, I'm sure. I just hope that your StB is well versed in tax law for Freiberufler.
Of course the situation is likely as not set to change to a certain extent if the tax "reform" proposed by the current government actually comes to fruition. I'm a cynical old fart, and I don't believe politicians for a nanosecond when they claim that a tax reform won't mean higher taxes, so I'm pretty sure that we'll all be paying the new municipal business tax (replacing Gewerbesteuer) when it comes along (the SPD has been trying to get Freiberufler to pay GewSt for decades). In that respect, it won't matter any more if we're Freiberufler or not, as we'll all be in the same boat.
At a more basic level, though, you're going to have to decide whether you want to be a translator, or to run an agency. It *is* possible to do both, but experience shows that one or the other will suffer in the long run. There's an old rule-of-thumb which says that real died-in-the-wool translators make absolutely awful agency owners, and I think there's a lot to be said for that. Mind you, a successful agency owner can make more money than a translator ever could. Choices, choices...
Robin
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