If what I read in "Spiegel" is right, Germany has one of the most complicated tax systems in Europe, and going by what is stated here, not very generous, either.
However, to the point:
Here in Spain (Canaries to be exact), the situation is parallel and I suppose in all EU countries too.
As an example, I am a self-employed teacher/translator, so my case is as follows:
Umsatzsteuer (VAT): you can apply for exemption here if you did not reach a turnover (Umsatz) of €23000 in the previous fiscal year. Do not forget that you do not "pay" VAT, you collect it for the State by charging it to your customers. What you take in, you compensate for by "verrechnen" with the VAT you pay on the things you buy for your business (VAT on books, printer cartridges, petrol, etc, but the exact details will depend on each region/country). The difference is what you have to declare every quarter to the tax office. You probably have to pay them, but an exporter for instance would likely be getting money back. Another thing, some activities (eg: teaching) are exempt. Translation however is not.
Einkommenssteuer (income tax): @ Findus #13. I don't agree that "... ist bei einem freiberuflich Selbstständigen der Gewinn gleich Einkommen." Again each country will be different, but you can deduct costs for your business (rent, Krankenkassebeiträge, bank charges, maybe petrol, or vehicle mileage, etc).
After that, the level at which you start paying tax will depend on other factors: dependents in the family, whether they have incomes or study, if you have a mortgage, etc. Surely even in Merkel's Germany you get a reduction for these things! :)