Working Life > Self-Employment > Trade > Home Trading

Home Trading

Definition, Explanation

German law defines a home traders in SGB IV § 12 as a person who

• work self-employed (unlike mere home workers)
• runs a trade business (no liberal profession)
• works in an own facility
• works for one or several clients, e.g. for traders, for non-profit organizations, for public corporations
• bears entrepreneurial risk
• may employ up to 2 workers
• freely schedules own working hours and procedures
• may be in possession of rather large company assets

Also, home traders may buy primary and auxiliary materials, themselves. They may work temporarily for no client and for own account. As a home trader, one produces, processes or packages commodities while doing a considerable share of the work oneself. Merchandizing of the products is done by the client.

Tax:

As a self-employed trader, you deduce:

• Income tax
• Turnover tax
• Trade tax

Rights in relation to clients:

• Minimum remuneration
• Vacation remuneration, respectively holiday pay
• Holiday money
• Sick benefit additional money
• Home-working or expenses money
• Capital-forming assets
• Insolvency money
• Short-time workers money
• Benefits from company’s insurance

For clients of home traders:

Any home trader that you commission must be stated along with others of his kind and with commissioned home workers in your home-working-lists which you have to report to the trade supervisory center.

Tips, Checklist

• As a home trader, while you are compulsorily insured in statutory pension insurance, this is not the case for health insurance, nursing care insurance and unemployment insurance
• As any trader, you are obliged to deduce trade tax
• For tax matters, turn to your revenue office or your tax adviser, for general matters to the trade supervisory center, for social insurance matters to the social insurance carriers

Last update: 08/03/2010