Services - Germany
The European Services Directive was to be implemented by the end of 2009. It aims to create a properly functioning single market for services.
Other laws interesting for services:
Types of services
In essence, German law divides the service sector into three categories: Industry, Crafts and liberal professions.
The craft economy distinguishes between businesses subject to mandatory licensing and those that are not. Special conditions apply to the former category of businesses.
The group to which your service belongs is based on the principles set out in the Income Tax Act (EStG). The liberal professions are listed under §18 Section 1 EStG. Income from the services of the trade and craft groups constitutes income from industrial or commercial activities (§15 EStG).
Different types of service provision
Setting up a service company
Temporary provision of services
Points of single contact
In the course of the implementation of the European Services Directive, points of single contact were set up in all European Member States. The points of single contact help service providers to commence and exercise their service activity by offering information and processing all administrative procedures with the relevant authorities on behalf of service providers upon request.
Businesses from the newer EU Member States are normally allowed to provide cross-border services using their own staff without a work permit. For certain sectors such as the construction industry, building sector, cleaning industry, etc. restrictions may apply.
Tax Office and social security providers
Individuals working in one of the liberal professions should notify the relevant tax office. Practitioners of liberal professions in Germany are not subject to business tax according to §18 EStG and therefore do not need to register their businesses. Individuals practicing an occupation not ranked as a liberal profession must register their businesses with the relevant trade licensing office. The classification as either a trader or freelance professional is based on the principles set out in the Income Tax Act. Where staff are employed, they should be registered for social security.
Proof of qualification
In the case of regulated professions, qualifications awarded in other EU Member States must be recognised for the purpose of accessing and exercising a particular profession.
Applications for such recognition should be sent to the office governing the relevant profession.
Details of regulated professions in Germany and the relevant authorities in the 16 federal states (Länder) can be found in the information system known as Anabin, which is designed to facilitate the recognition of educational qualifications from outside Germany.
Work permit applications
Some EU nationals have to apply for a work permit for an interim period; however, this is not the case with services.
Basic information about the various liberal professions is available from the Federal Association of Liberal Professions (Bundesverband der Freien Berufe – BfB).
Advice on which crafts require authorisation and other important pointers are available via the relevant Chambers of Handicrafts (HWK).
Detailed information on the various service divisions as well as the occupation of foreign employees can be found under:
Information on work permits can be obtained from the local Employment Agency.
Check also the legislation on this topic in: