I have a question....

Hi!
I'm new here and have a question....
Do I need a business license to sell patterns???
I know it's a tiresome topic, but I just can't seem to figure it out...

Thanks so much for your help!!!

Yes, you do. No matter what you want to sell, you want to sell it at a profit. And for that, you need a trade license. I recommend that you inform yourself thoroughly beforehand. Various places also offer free or low-cost advice. I can only recommend a seminar on self-employment, small businesses, and basic bookkeeping.

It’s best to ask at biz and vhs.

And it might also be a good idea to consult a tax advisor

Definitely! My tax advisor put it this way: As soon as you make something with the intention of reselling it, you’re running a business. And I really wouldn’t count on it going unnoticed. Platforms like crazypatterns, eBay, DaWanda, etc., are monitored pretty closely. Almost every tax advisor offers a free initial consultation—I’d take advantage of that. Registering your business is a breeze and doesn’t cost much. It gets expensive if you get caught.

Hi Speiderweib,

I think the laws vary from country to country. The answers above apply to Germany. I think asking the tax office doesn’t cost anything ;-).

Best regards
Alexander

But it was explained to me quite differently: It depends on whether you’re selling the finished items (in which case it’s a business) or just e-books and templates—in that case, it’s considered freelance artistic design work and not a business. As a craft book author, you’re not considered a business owner, but rather a freelancer.

But you can only call yourself a freelancer if you’ve completed the appropriate training in that field. Otherwise, it’s not possible—you have to register a business. I know because I tried it :-). But whether you’re a business owner or a freelancer, you have to register for tax purposes either way.

I have no objection to registering for tax purposes.
Regarding training: I think you’re mixing up two unrelated things here. You’re not allowed to call yourself a designer if you don’t have the appropriate training, but you can still sell your own designs as a freelance artist. So you can work freelance (i.e. not commercially) as a book author, composer, musician, sculptor, or designer without having any formal training; for some professions, you’re just not allowed to use the corresponding title if you don’t have the appropriate training.
However, registration and taxation aren’t about titles, only about the type of activity—if my work is artistic (and when I invent something new, I’m doing artistic work), then I’m allowed to be a freelancer.
I’ve been filing my tax returns as a freelance artist for years. As my type of activity, I write “craft pattern design.” As long as I don’t write anywhere that I’m a designer, everything is correct.

Hi!

I also highly recommend registering a business—it’s pretty simple and doesn’t cost much...
It’s also exempt from VAT up to a certain annual revenue threshold:

“The small business exemption applies if taxable revenue, including the applicable sales tax, does not exceed 17,500 euros in the year the business is established, according to Section 19 of the Sales Tax Act, and is not expected to exceed 50,000 euros in the current calendar year.
Small business owners can choose whether or not to include VAT on their invoices. If VAT is not included, no input tax credit can be claimed. This is worthwhile for anyone who does not have high ongoing expenses—either when starting the business or later—from which they could otherwise deduct VAT. The advantage is that small business owners are spared the hassle of constantly filing reports with the tax office.”

So it’s quite simple and straightforward. If I were you, I wouldn’t charge sales tax or list it on your invoices. Up to the annual sales threshold mentioned above, it’s not necessary to charge sales tax anyway. Under the small business regulation, bookkeeping is limited to a simple income/expense ledger, where costs and sales are simply listed.

As far as I know, you still have some time to register your business — so you can think it over...
But I wouldn’t wait too long...
You can find all the additional information here:
http://www.gruenderlexikon.de/magazin/gewerbeanmeldung-faq-14

If you want to get started right away, just add “i.Gr.” (short for “in Gründung,” meaning “in the process of being established”) next to the company name on your invoices. Although this is usually only done for a GmbH, it lets your first customers know what’s going on.

I hope this has been helpful.

Best regards and have fun,

BettyBoom

But I don't see from your post why registering a business would be better than working as a freelancer.
Everything you described applies to freelancing just as much, and unlike registering a business, freelancing doesn't cost "not much"—it costs nothing at all.
And if you ever want to do this as your main job, you can get health insurance through the artists' social insurance fund; with a registered business, you have to cover the full cost of health insurance yourself.
It is a bit strange that in all the relevant forums, people always advise using every opportunity to register as a freelancer instead of registering a business. Only here people are saying something completely different, and I don't understand that...

The easiest thing to do is ask your local tax office. They’re the ones who ultimately decide whether this qualifies as freelance work. Each tax office handles this differently.
It’s worth noting that you’re dealing with digital goods (goods) here. Selling goods is definitely not considered freelance work.
You’re acting as designers and sellers. Designers are now generally classified as freelancers, but you’re not selling your designs—you’re selling templates and patterns that can be used to create your design. That’s a key difference.

Here’s the tip again: Ask your tax office! Providing incorrect information can end up being very costly.

Quote: “Every tax office decides this differently.”

That’s exactly why you should explain your perspective to the tax office—the people who work there know about finances, but not about art and design.

Quote: “Designers are now classified as freelancers, but you’re not selling your designs—you’re selling templates and patterns.”

But you’re getting something completely mixed up here: If I, as a designer, sell finished items (e.g., knitted jackets I designed), then the question might arise as to whether that’s art or a trade. But when selling your own ideas in the form of drawings, sketches, sheet music, knitting patterns, etc., this is exclusively creative work and therefore freelance activity—no tax office will rule otherwise, unless you insist on registering a business (which I personally consider unwise).
We sell our creative ideas, and since ideas can’t be transmitted via telepathy, we use drawings and patterns to convey them.

I don’t see it that way, and unfortunately neither does my tax office.
I market a good (merchandise) that I developed myself. So I market my own idea as a product.
It would be different if I had my idea marketed by a third party. Then I would only be acting as a designer or freelance artist, and others would market it. That’s how it is in the music industry, for example. No artist markets their music themselves. There is always a company between the musician and the end consumer. It works similarly with books. No regular book without a publisher. Even self-created books are always marketed through third parties. The principle works, for example, if Crazypatterns acts as the seller and you merely provide the idea. However, CP would have to handle the accounting differently. You are the developer and seller of an idea. As a developer you are freelance, as a seller you are running a business.

The craft book author does not sell their book themselves; a publisher does, and the author receives a fee from the publisher for the idea, so they remain freelance. The publisher, in turn, is running a business and has to pay taxes on the book’s revenue.

If you, as a painter, sell a painting of yours, you remain an artist and freelancer, since you can only sell that one item. If the painter creates a template using “paint by numbers” and sells it, they are conducting trade and become a business operator. If they commission a third party to sell the template, they remain a freelancer.

No matter how you look at it, it doesn’t save you a trip to the tax office.

Check this out:
http://www.existenzgruender.de/SharedDocs/BMWi-Expertenforum/Gruendungsplanung/Freie-Berufe/kuenstl-publ-Taetig/Selbstgeschriebene-eBooks-verkaufen-gewerbliche-oder-freiberufliche-Ta.html

You know, I’ve actually already said everything there is to say about this. Everyone should decide for themselves whether they’re willing to classify themselves as a business owner (the tax office will be happy) or, given that the work is mainly creative, take advantage of the option to register as a freelancer instead.

Hi. I stumbled across this conversation by chance. You’re talking about two completely different things: trade law and tax law. You’re definitely not considered a freelancer if you haven’t studied your “field” or at least completed training in it. There’s case law on this. You have to register a business immediately—starting with the first euro—if you plan to sell something more than just once.

Well, I do it as a freelancer, too. I create e-books! According to our tax office, that counts as being a writer (there’s no formal training for this in Germany) and therefore as a freelancer. But I think it makes a difference whether you sell through CP/Amazon and transfer the rights, or sell the pattern to individual buyers, like on Dawanda or Etsy. I’m not sure about that. According to the freelance regulations, self-publishers are also included.

 

So, I think this still hasn’t been understood.... As far as the tax office is concerned, that’s tax law—they might classify it as freelance work, but that doesn’t mean you don’t have to register a business, because that falls under what’s called trade law. According to that law, if you plan to sell something—and you’re selling it for a profit—you have to register a business.

Creating ebooks = freelance work, BUT as soon as you also sell them (more than once), it becomes a commercial activity, and you have to register a business for that. 

Okay, now I’m a little puzzled myself, because I often read online too:
authors are also allowed to sell their own works. How else would authors make a living?

It’s all really very complicated, mmmmh

In our case, my daughter registered a business because she plans to sell both her self-published books and my patterns.

What exactly do you mean by “selling your own work,” Claudia?
Do you mean directly, without a publisher, as a self-publisher?

Hm ... then it's probably at the discretion of the tax office, and there is no difference between tax law and trade law—at least not as far as taxes are concerned. If you have a business, you pay trade tax—that goes to the tax office.

I've been with a tax firm since the beginning of 2017, and the very first thing they explained to me was that I am engaged in author work, and therefore submitted freelance status to the tax office for me and got it approved (North Rhine-Westphalia).

The situation would be different if I were selling finished products or paper printouts of my patterns. If he's wrong, that would be his problem :-)