German official terms explained

General explanations about starting a business in Germany, not individual legal, tax or insurance advice. Specific official decisions, contracts and individual cases are not reviewed here.

AVGS – Aktivierungs- und Vermittlungsgutschein

A voucher for suitable support on your path into work. Its purpose, validity and conditions are stated on the voucher. The voucher alone does not authorise you to start funded coaching: you need written approval (Bewilligungsbescheid) from the Agentur für Arbeit or Jobcenter before starting. Open the related tool: AVGS – Aktivierungs- und Vermittlungsgutschein →From AVGS to coaching: the steps and approval →

Bewilligungsbescheid

An authority’s written decision approving support. Read the conditions and period too. A consultation is not approval. Open the related tool: Bewilligungsbescheid →From AVGS to coaching: the steps and approval →

Ermessensleistung

Discretionary support: the authority decides on your individual case within the law and must follow the purpose of the support. This is not an arbitrary decision; meeting the conditions does not automatically mean approval. Open the related tool: Ermessensleistung →

Maßnahmeträger

An organisation providing funded support, such as coaching. The specific programme must also match your voucher. Open the related tool: Maßnahmeträger →

Agentur für Arbeit

The employment agency: a contact for job placement, Arbeitslosengeld and Gründungszuschuss, among other things. It is not the same as the Jobcenter. Open the related tool: Agentur für Arbeit →

Jobcenter

A contact for basic income support and help entering employment. The responsible office depends on your situation. Open the related tool: Jobcenter →

Finanzamt

The tax authority. It processes your tax return and assesses your tax, for example. Open the related tool: Finanzamt →

Umsatz

Income from your sales or services before deducting business costs. Enter it excluding VAT in our planning calculators. Open the related tool: Umsatz →

Gewinn

In simple terms: revenue minus business expenses. This is not yet the amount you can spend privately. Open the related tool: Gewinn →

Zu versteuerndes Einkommen (zvE)

The amount used to calculate tax after permitted deductions. It is not revenue, gross salary or profit. You can find it, for example, on your income tax assessment. Open the related tool: Zu versteuerndes Einkommen (zvE) →

Einkommensteuer

Tax on the taxable income of individuals. The basic tax-free allowance is already included in the tariff. Open the related tool: Einkommensteuer →

Ehegattensplitting

A tariff method for eligible joint assessment: calculate tax on half the combined taxable income, then double it. The combined income is required. Open the related tool: Ehegattensplitting →

GKV / PKV

Statutory / private health insurance. Eligibility, contributions and benefits differ. Have your insurance status checked before making a change. Open the related tool: GKV / PKV →

Selbstbeteiligung

The part of an insured loss you pay yourself. Check whether it applies per claim or per period. Open the related tool: Selbstbeteiligung →

Deckungssumme

The agreed maximum insurance payout. Lower sublimits for individual risks and annual maximums can further restrict protection. Open the related tool: Deckungssumme →

Liquidität

Liquidity means being able to pay bills and other obligations when they fall due. What matters is when money actually comes in and goes out. Making a profit does not necessarily mean you have enough cash available. Open the related tool: Liquidität →

Eigenmittel

Own funds are your own money that you can put into starting your business, such as available savings. Borrowed money does not count. Keep enough aside for your personal living costs. Open the related tool: Eigenmittel →

Grundfreibetrag

Basic tax-free allowance: the portion of annual taxable income on which no income tax is charged under the regular German income tax tariff. It is already included in the tariff; do not deduct it again from zvE in our calculator. Open the related tool: Grundfreibetrag →