In Germany, if you sell or rent out something on an ongoing basis next to your job and aim to make a profit, you usually need a side business (Nebengewerbe). Registering usually takes less than an hour, and with small revenues many taxes do not apply at first. This article shows the steps and the thresholds that apply in Germany in 2026.
In brief
In Germany you need a side business (Nebengewerbe) if you regularly sell or rent out something next to your job with the aim of making a profit. You register at the trade office (Gewerbeamt), then fill in the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) via ELSTER. Under the small business rule (Kleinunternehmerregelung) you pay no VAT up to €25,000 in revenue in the previous year, and trade tax (Gewerbesteuer) only applies from €24,500 profit.
Contents
When do I need a side business?
As soon as you are active regularly with the aim of making money, for example with an online shop, a vending machine or a powerbank station. Freelance work (freiberufliche Tätigkeit) such as writing, teaching or consulting is not a trade in Germany. You only need to report it to the tax office (Finanzamt).
How do I register a side business?
- Register your business at your local trade office (Gewerbeamt), online in many cities. The fee depends on the municipality and is usually a low double-digit euro amount.
- Fill in the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) via ELSTER, the German online tax portal. Among other things, this is where you decide whether to use the small business rule (Kleinunternehmerregelung).
- Wait for your tax number (Steuernummer). The tax office usually sends it within a few weeks.
- Tell your employer if your employment contract requires it (see below).
Which taxes apply to a side business?
| Tax | What applies in 2026 |
|---|---|
| VAT (Umsatzsteuer) | None as a small business (Kleinunternehmer), as long as revenue was below €25,000 in the previous year and does not exceed €100,000 in the current year |
| Income tax (Einkommensteuer) | The profit is added to your salary and taxed at your personal rate. If all your additional income stays below €410 a year, it usually remains tax-free for employees (hardship relief, Härteausgleich, reduced up to €820). |
| Trade tax (Gewerbesteuer) | Only applies to sole traders from a profit of €24,500 a year |
Important: It is the profit that is taxed, not the revenue. Expenses such as buying a station or a vending machine reduce your profit. Depending on the price, equipment is written off immediately or over several years. Best to clarify this with a tax adviser.
Do I have to tell my employer?
Under German law, your employer can only forbid a side business in exceptional cases, for example if you compete with them or your work suffers. But many employment contracts require you to report side activities. A quick look at your contract will tell you. In practice, a business that takes little time and has nothing to do with your job is rarely a problem.
What about health insurance and pension?
As long as your main job as an employee takes up most of your time and income, you stay insured through it as normal. The side business changes nothing. It only gets tricky once self-employment becomes your main focus in terms of time or money.
Frequently asked questions
How much can I earn with a side business?
There is no fixed upper limit. But above certain thresholds, the taxes you owe change (see table).
Can I run a powerbank station as a small business (Kleinunternehmer)?
Yes. With Limitless Charging you receive your earnings via a monthly credit note, and billing then works without VAT as well.
Do I need a tax adviser?
It is not mandatory. But for your first tax return with a business, advice is often worth it, especially for depreciation.
Note: This article refers to German rules and does not replace tax or legal advice. Figures as of October 2026.