How do I open an IT company

Self-employed as an IT specialist: this is how you successfully set up your own IT company

Regardless of whether you are a freelancer or a trader, you have to pay income tax as well as sales tax. In the following, we will briefly explain the most important things to you.

Income tax

If you run your IT company as a sole proprietorship or partnership, whether in the context of a freelance activity or a commercial enterprise, you have to pay income tax on the profits you have made.

You pay your income tax through a quarterly prepayment. However, the tax rate cannot be given as a flat rate. Because as your profits increase, so does your tax burden. One speaks here of a so-called progressive tax rate. With the help of various online tools, for example the wage and income tax calculator of the Federal Ministry of Finance, you can have your individual tax burden calculated.

In the event of deviations from the prepayments you have made, the tax office will request additional payments. You should therefore try to estimate your winnings as accurately as possible so that you do not run into financial difficulties afterwards.

Corporations are an exception: Corporations must pay corporation tax on their income instead of income tax. Since the corporate tax reform in 2008, the tax rate for this has been a uniform 15 percent. In addition, the solidarity surcharge of 5.5 percent is levied.

Sales tax and sales tax advance notification

As a self-employed person, you usually collect a Sales tax on sales from the sale of goods or the Provision of services. In the IT industry, you have to pay the full tax rate of 19 percent apply, as the reduced tax rate of 7 percent only applies to certain products, such as books or groceries.

The collection of sales tax also obliges you to register regularly for sales tax. The frequency depends on the amount of your sales tax to be paid in the previous year and has to be done either monthly or quarterly. The pre-registration will also only be sent electronically to your responsible tax office (Section 18 (1) of the Sales Tax Act (UStG)). Danger: As founder you have to go into the first two years Your independence without exception monthly VAT return Submit. The general rule then applies from the third year onwards.

As a self-employed person in the IT industry, you are required to submit an income tax return and a sales tax return. These must be sent electronically to the tax office. You can use the ELSTER portal or any other control software for this.