Tax allowance for the self-employed: basic 15% up to €33,000 profit (max €4,950), investment-based above that.
Definition
The profit allowance (Gewinnfreibetrag, § 10 EStG) reduces the taxable profit of individuals with business income, that is the self-employed, one-person firms and trade licence holders. It has two parts: the basic allowance and the investment-based profit allowance.
Basic allowance
The basic allowance is 15 % of profit up to € 33.000, so at most € 4.950. It applies automatically, without any investment, and is included in the SVS & tax calculator.
Investment-based profit allowance
Above € 33.000 profit there is also the investment-based profit allowance, graduated at 13%, 7% and 4.5%, up to €46,400 per year in total. It requires actual investments in eligible assets or securities and is therefore not applied automatically in the calculator.