What is income from business operations?
A business operation according to § 15 EStG exists if you engage in an activity independently (i.e. on your own account and responsibility), sustainably (i.e. not a one-off action) and with the intention of making a profit (i.e. not a hobby) and participate in general economic transactions (i.e. appear externally). However, these conditions apply equally to freelance work according to § 18 EStG.
Businesses include:
- Craft and industrial businesses,
- Trading businesses,
- Brokerage activities (e.g. insurance agents, brokers or commercial agents),
- Catering businesses,
- Service companies.
- Corporations such as public limited companies (AG) and limited liability companies (GmbH) are businesses by virtue of their legal form (§ 2 para. 2 GewStG).
Income from business operations also includes:
- Profit shares from participation in a partnership (oHG, KG or commercial GbR).
- Income from the sale of a business, part of a business or a share in a business.
- Gains from the sale of a share in a corporation if this amounts to at least 1% of the share capital (§ 17 EStG). This also applies to private investors. Since 2009, the partial income procedure applies, i.e. 60% of the capital gain is taxable and 40% is tax-free (§ 3 No. 40 letter c EStG). For shares acquired before 2009, the half-income procedure with its half taxation still applies.
- Income from the sale of more than 3 properties within 5 years. In this case, the tax office assumes commercial property trading, regardless of the 10-year period.
- Income from the rental of holiday homes if the type of rental is comparable to a commercial accommodation business. Otherwise, it is "income from renting and leasing".
- Professional carers according to §§ 1896 ff. BGB have not earned income from business operations since 2010, contrary to previous opinion, but from "other self-employed work" according to § 18 para. 1 no. 3 EStG (BFH rulings of 15.6.2010, BStBl. 2010 II p. 906 and 909).
