Registering a business as a photographer is usually not a big challenge. You do not have to comply with certain obligations for permits, and no specific permits are required. However, what is important to you is the assessment of your profession as a photographer by the tax office.
You are only exempt from the commercial obligation if you are recognized as a freelance activity. This means that you don’t have to register a business as a photographer. But when do you have to register a business as a hobby photographer, and in which cases is a business registration necessary for you as a photographer? You can find answers on this topic in the following article.
When do you have to register a business as a photographer?
When it comes to photography and business registration, you have to pay close attention to how your job is classified. Section 18 of the Income Tax Act states that freelance activities are also artistic activities. This classification also applies to you as a photographer. As a result, business registration is not necessary.
But now comes the big but. There are also cases in which your activities as a photographer are classified as manual activities. In this case, there is no way around a business registration. To be on the safe side, you have to find out exactly which classification applies to you in advance. The best way to do this is directly at the tax office.
Differentiation between freelance and commercial activity
Doesn’t it matter what activity it is? A photographer is a photographer. Unfortunately not, and you can’t say it that easily. Ultimately, this demarcation between freelance and commercial activity is defined by the legislator. However, this distinction remains quite difficult and is more fluid.
When differentiating between freelance and commercial activity, attention is paid to professions for which you need a special qualification, or this activity is associated with creative talent. In this case, the legislature speaks of freelance activities. But even Section 18 of the Income Tax Act does not provide any real help with this delimitation. The boundaries are and will remain fluid.
Strictly speaking, as a photographer, you perform both activities. You are artistically active, but you also do a craft activity. To make this easier to understand, here are a few examples of the distinction for you.
- You are a photojournalist and, therefore, a freelancer. You are exempt from registering as a photographer here.
- You mainly take wedding photos and run a photo studio. In this case, you also have to register a business as a freelance photographer.
- You work as a photographer on behalf of companies and create and edit these photos. A very good example here is working as an advertising photographer. In these cases, you offer professional services and are therefore obliged to register a business.
- The only question now is what you have to do as a hobby photographer or as a part-time photographer. That, too, can be answered quickly.
- Only minor revenues will achieve you as a hobby photographer, representing more of an allowance you need as a hobby photographer no sign industry.
- As a part-time photographer, you are also obliged to register a business. However, you can list the income from this part-time activity in your tax return as additional income.
You can see for yourself that it is not easy to make a precise distinction between freelance and commercial activities. It is therefore very important that you inquire carefully. That is also in your interest. If you do not register a business as a photographer, but this is necessary, you face severe fines and back taxes.
Registering your business as a photographer: step by step
Registering a business as a photographer is not a big challenge, but you should prepare for it. Before registering as a photographer, you should answer a few questions yourself.
Do you want to do a secondary job as a photographer, or should it be your main occupation?
Is it perhaps better to start with the small business status at the beginning?
You need a very important document to register as a photographer. You learned above that it is not always easy to draw a line between freelance and commercial work. Therefore you need a job description for the business registration as a photographer. In this, you have to describe exactly what your main activities are. But this is only one step and a few more steps to follow.
Step 1: Inform your employer
If you want to register a business as a hobby photographer and do this as a part-time job, you must inform your employer beforehand. If you conceal your secondary employment from your employer, this can be a reason for termination. Usually, employers don’t mind, at least as long as your actual work doesn’t suffer. But inform him in good time about your business registration and save yourself unnecessary trouble.
Step 2: The business registration
If you are classified as an artist for your photographic activities, you are a freelance photographer and do not register a business.
As a freelance photographer, your job can also be classified as commercial activity, and then you are obliged to register as a business. To register your trade, you have to contact the trade office of the city in which you want to practice your trade and then issue you your trade license. In many cities, you don’t even have to appear in person as a photographer to register your business, and you can do this online. In any case, you will need the following documents to register:
- Identity card
- a certificate of registration for the event that you have a trade register entry has
- possibly a police clearance certificate
- Job description and completed form for business registration
You have to fill out a form for the business registration and pay a few euros for the registration. The cost of registering a business varies from city to city and, based on experience, is between 20 euros and a maximum of 70 euros.
After you have submitted all documents and registered your business as a photographer, the trade office automatically informs other authorities:
- Information to the responsible tax office
- Information to the responsible trade association
You will receive mail from these authorities a short time later, and you will have to provide further information. For the tax office, for example, you have to fill out a questionnaire on tax registration.
Step 3: Information to the tax office
As already mentioned, when registering as a photographer, the trade office automatically informs other authorities, including the tax office. Usually, you will receive a mail from the tax office with a questionnaire after about two weeks. You have to fill this out truthfully because it is used for your tax registration. Among other things, you are required to enter an estimated annual turnover. You can also use this form to apply for the small business regulation.
Step 4: The business registration with the Chamber of Crafts or IHK
If you want to register a business as a photographer, the Chamber of Crafts will usually contact you after registering the business. There the assumption is made that you are working as a photographer on behalf of customers. If this is the case, you must also register there with the Chamber of Crafts. If this is not the case, you can explain this in detail in the attached application. The Chamber of Crafts will then pass you on to the IHK, the Chamber of Industry and Crafts. That would be a clear advantage for you because the costs for the IHK are significantly lower.
Here is an example of the costs when using the small business regulation with an annual turnover of fewer than 22,000 euros.
- In the first year of registration with the Chamber of Crafts, you are free of charge. However, the registration costs you 150 euros.
- In the second and third years, you have to pay half of the necessary amount (156 euros).
- The full basic amount is due in the fourth year.
- The costs for you at the Chamber of Commerce and Industry are lower.
- If the profit is less than 5,200 euros per year, the IHK will cost you 0 euros.
- With a profit of over 5,200 euros up to a profit of 25,000 euros per year, you only have to pay 25 euros.
Step 5: start creativity
Once you have registered as a photographer and you have done all the paperwork, you can start. You can now let your creativity run free and get down to work. The question of whether anyone can become a photographer can be answered with a resounding yes. However, here too, you never stop learning, and, especially at the beginning, you are anything but perfect. So you not only have to try out a lot of new things, you also have to practice again and again. It is best if you start small and gradually work your way up.
Taxes in ancillary business
It does not matter whether you have registered a secondary trade or work full-time as a photographer with self-employment. You have to pay taxes in both cases. Registering a business as a photographer and working in the secondary business does have some advantages from a tax point of view, which you have to consider.
You do not have to pay taxes in your secondary business until you have made a profit at the end of a financial year.
If your expenses are higher than your income, you don’t have to pay taxes.
But one thing must be clear to you. Even if you decide to register a small business as a photographer and get a trade license for photography, you are responsible for paying taxes yourself. Specifically, this means that you have to take care of the proper bookkeeping yourself.
Bookkeeping, income tax, and profit assessment
It doesn’t matter whether you work as a full-time or part-time photographer. Proper accounting is always a prerequisite. You have to give everything to the tax office. You must record everything that has to do with your activity. It would help if you had this for your annual income tax return, which you must submit. In addition, you may also have to submit a sales tax return and a trade tax return.
There are also other points to consider:
Regardless of whether you are a sole trader or a freelancer, a simple income statement is sufficient to determine your profit at the end of the year. This EÜR is always sufficient if your annual profit does not exceed 60,000 euros or if you do not make more than 600,000 euros in sales per year according to § 141 AO .
Exceeding these limits means that you, like any large company, are obliged to keep double-entry bookkeeping. You will also need to draw up a balance sheet and a profit and loss account. However, you can then no longer do this yourself, and you need both a tax advisor and an accountant.
The sales tax in ancillary business
In Germany, the so-called sales tax applies to almost all services or goods. As an entrepreneur, you have to submit this sales tax to the tax office, but you get it back from the tax office as input tax.
However, the situation is different for ancillary businesses, especially if you use the small business regulation. In this case, you do not have to pay sales tax, but you are also not allowed to include this sales tax on your invoices. Compared to a company that pays the sales tax, this is not a financial advantage because they get their sales tax back.
Registering a business as a photographer is not particularly difficult. In advance, however, it is not easy to draw a line between freelance work and commercial work as a photographer. As a freelance photographer, you don’t have to register a business. However, there is a commercial activity; whether you sign a small business as a photographer or a side business as a photographer, there is one for your notification.
If you only expect low income, the small business regulation is an option at the beginning. Starting as a sideline is also a good idea because you still have the security of your actual job in this case. You also have to pay attention to accounting and taxes in the secondary business as a photographer because you are responsible for registering a business as a photographer.