Next April I am going to start a master program in Germany living on a student visa.
Currently I am working as a freelancer on Upwork. I know that in Germany it is not permitted for people on student visas to work as freelancers, but, to the best of my knowledge, it only applies if the source/destination of income is Germany.
In my case, the source of my income would be Poland and the destination would be Egypt. Does this prohibition apply to me?
Apparently (IANAL),
§ 16 Aufenthaltsgesetz is about student residence permits. (3) says:
The temporary residence permit shall entitle the holder to take up employment totalling no more than 120 days or 240 half-days per year, and to take up spare-time student employment. [...]
Also in the German version the term for employment means employment as opposed to self-employment. So the student visum alone does not allow freelancing.
But §21 Aufenthaltsgesetz which is about residence permit for the purpose of self-employment. (6) says:
A foreigner who will be or has been granted a temporary residence permit for another purpose may be permitted to pursue self-employment while retaining the aforesaid purpose of residence, if the permits required pursuant to other provisions have been issued or the authorities have indicated that such permits will be issued.
which I reas as: you need to get that additional permit, but it is possible. You may have to declare that the freelancing is just a side-business and will not take up more time than the 120 days/240 half-days (also German students loose student status if they work too much), and will not interfere with the progress of your studies.
The Ausländerbehörde (foreigner's office) can tell you more.
As I understand, you can then register that business with the tax office. It will then be a German business.
My guess is: if you already have a freelancing business somewhere else (Egypt), you may not need to register another one in Germany. I'd go and ask the tax office. Nowadays their service center got training in being friendly to clients ;-) and they actually have a duty of telling you how to correctly fill in their forms and what declarations you need to submit and so on. Whatever their answer is, it does have the advantage that you can always say "I did ask the tax office, here's the letter in which they told me that I (don't) need to register." You can very officially rely on their answers.
If you need (or want) to register in Germany, find out about the peculiarities of freelancing in Germany. Not everyone can freelance, this is reserved to certain professions. For other professions, a different registration (commercial) is needed.
In any case, you'd probably want to use Kleinunternehmerregelung which makes you exempt from VAT (which would otherwise mean that you'll have to file VAT declarations every month). Careful: if you are physically in Germany while working for your freelance customer, the service you provide will usually be subject to German VAT. So even if you do not need to register your business in Germany, you may nevertheless need to do VAT declaration.
Regardless of whether you need to register your business in Germany or not, if you are German tax resident (e.g. you are in Germany for > 180 days/year), you need to report the foreign freelancing income. It may or may not be taxed. The income tax sheets ask separately for already taxed and not-yet-taxed foreign income. In any case, it enters the German tax declaration because of progressivity proviso (German income tax rate depends on your total income). If you already paid taxes for this income in Egypt, you need to look up whether Germany and Egypt have a double taxation treaty that says how the Egyptian taxes are accounted for in the German tax declaration.
All that being said, when I was working in Italy, I decided to temporarily stop my German freelancing in order to not add another layer of hassle to my tax declarations. And if it is only a small side job to help during your studies, that will probably not earn enough to pay a tax lawyer for Polish-Egyptian-German work and tax declarations.
I do recommend considering whether a "normal" student job is much less work (including the declarations and getting the permits) for the same money.
I am working in Germany as a Develop / Software Engineer, and in my free time, I work as a freelancer in some websites (one of them,upwork).
According to my my german co-workers (they are doing the same), any incoming you should report it in Germany, and in the opposite case, that will be declared as tax evasion (the worst thing what can happen to you in Germany).
An other information, any small business on the side (selling some products on ebay for example, or renting your room for someone for holidays), should be registred in Germany.
For your case, as you are working from home, and the money will be deposited in one account in Egypt, the chances that you are catched are inconsiderable, but the day they know it, then you have to prepare yourself to have alot of problems.
Finanzamt near to you and to ask, there is something like freelancer profile, I forgot the exact word, you need to have it if you want to work as a freelancer, also you can get a VAT number.
Finanzamt will not help too much with this question. It is clear already that if a person lives in Germany, then usually he/she need to submit tax declaration in Germany (of course, there could be different circumstances also including a tax agreement between two countries, which is relatively simple to find online).
@Badle: there are definitely ways to declare it and in many cases you should do it. If unsure, please ask tax consultant.
However, the original question is not about taxes, it is about if a person can work as a freelancer while he/she is not allowed to "work as freelancer in Germany".
Here are my 2 thoughts:
1) If you are allowed to work in another country (e.g., your country of origin) then of course you can work there when, for example, you go there for a travel. However, if you are physically in Germany while working, then I'm not sure how to prove that German laws does not apply here.
2) You can simply get a permission for a freelance job, please see last page of this document
P.S. I'm not a lawyer.
