Pay taxes as an escort lady - How does it work?
All about taxes for escort ladies: Understand the types of taxes, obligations, and optimization options for your escort business
by Bell Bennett
6 minutes read
The job of an escort lady is experienced by many women as extremely lucrative due to numerous luxury attributes. In fact, with a certain talent for customer loyalty, high amounts of money are regularly awaited. However, these are not occasional gifts, we are talking about a solid income.
It is money that is taxed in Germany, no matter how you earned it. Ideally, this will allow the country to fund all the community facilities and security systems that you (and everyone else) will eventually benefit from.
The amount of these taxes will not be flat-rate, but adjusted to the size of your real income, in order to try to create a certain equality of opportunity.
The state system is very much based on these processes and is behind the payment of the money. Accordingly, hardly anyone can expect to escape the tax burden by falling through the cracks in any way whatsoever.
A note up front
Of course, an escort agency is not a tax consulting firm and therefore there will be only some basic tips on the subject of taxes on this page. However, the topic itself is of great importance for you as an escort lady.
Again and again, individual ladies get into trouble with the tax office, whether out of ignorance or unreasonableness. The fact is: Whoever does not properly tax his earnings, must expect serious consequences up to criminal prosecution. Criminal processes regarding evaded taxes are well known in the media and can affect anyone.
Your employment relationship as escort lady
Of course, different business models exist, but in the very most cases escort ladies can consider themselves as "independent trader". This is the case when you work as an independent escort and also when you work with an agency. This factor should be noted accordingly in your contract.
You are not employed by an escort agency
Types of taxes to be paid
Regardless of whether your activity is full-time or part-time, you always pay taxes. As a self-employed person, you do not have to pay salary tax, but you do have to pay income tax. Depending on the type and volume of your business, you will also have to pay varying amounts of sales tax, trade tax and sometimes entertainment tax. Please note that different regulations may apply in different cities and municipalities. If you move, you also have to register your business and are obliged to inform yourself according to the applicable regulations.
You didn't know that - what happens now?
If you do not register your profession, you can still expect to come to the attention of the tax office sooner or later. If only because different offices, insurance companies and financial institutions communicate with each other to a certain extent. If you have a good profit, you will probably be in the focus of the responsible persons quite quickly.
A lot of money rarely goes unseen
After all, you will hardly store several thousand euros a month under your pillow. You will deposit your earnings at the bank, in an account from which your rent and insurance costs can also be deducted. The bank will notice that you regularly have large amounts of money that seem to come out of nowhere.
The credit company of your choice is authorized in these cases to ask you for proof of the source of the money. It is even the duty of your bank to investigate suspicious account movements. In addition, a report to the tax office is to be expected. If you want to avoid unreasonably high additional payments, it is therefore better to react as soon as you start your business.
Help from tax advisor strongly recommended
Once you have received a reminder letter, you should contact a tax advisor to be on the safe side. He or she will be able to confirm the source of your income to the bank. He is authorized to prove that you intend to pay tax on your income or, optimally, that you already do.
If you are now in an exchange with the bank about your income, take this opportunity to make a direct note that you are self-employed and will continue to draw large amounts of cash from your business in the future.
This way, you will not have to justify yourself again a few months later, for example, because a new employee repeatedly raises suspicions.
The tax advisor will be able to support you directly in the further
steps, also with regard to the information for the tax office.
No solution is to hope that things will solve themselves. They won't. At most, your account will be blocked and the tax office will be notified directly.
So do yourself a favor and make a timely effort to find a good solution for your personal finances. The issue may be troublesome, but it is unavoidable. Once you have found a good system for you, this point will certainly take care of itself. In addition to the advice of tax advisors, nowadays there are also more and more uncomplicated online services available to help you fill out tax-related documents.
How much are your tax payments?
You will have to expect a sales tax of 19%. This will be transferred to the tax office on a monthly basis. Note that the sales tax on your income can be offset against the value added tax on your expenses. Ask your tax advisor for more detailed information on this.
The income tax is paid separately once a year or quarterly. This can vary depending on the tax category. Read up on the current tax allowances for the current calendar year. Up to this value, your income remains tax-free. In 2023, this limit is 10,908 euros/year for single people. Different values apply to couples, and the care of children also has an effect on these amounts.
Do I apply as a freelancer or a trader?
Your job as an escort lady is legally considered a trade and every trader has a so-called duty of disclosure according to the german law § 14 Gewerbeordnung (GewO). From this follows that you pay a trade tax in addition to the amounts mentioned. This differs from place to place, but is generally only due from a profit of more than about 24,500 euros per year.
The consequence of this - it is necessary to set reasonable prices
As you can see, the high prices that clients pay for your services are more than fair. You not only give a lot of yourself and face extraordinary burdens, you also have to deal with plenty of taxes.
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