What is the small business regulation (Kleinunternehmerregelung)?

Key points

There are two thresholds: one for the previous year and one for the current year.

What you save:

• no VAT on your invoices
• since 2025, no advance VAT returns (Umsatzsteuervoranmeldungen) and generally no annual VAT return
• no obligation to issue e-invoices

What remains:

• a mandatory note regarding the tax exemption on every invoice
• Körperschaftsteuer (corporate income tax), Gewerbesteuer (trade tax), and annual financial statements
• VAT on services from foreign providers such as Google or Meta (reverse charge)

If you exceed the upper threshold in the current year, turnover from that point onward is immediately taxed normally. If you show VAT on an invoice anyway as a small business, you owe it.

Figures & thresholds (as of November 2026)

• Previous year: total turnover at most €25,000 net
• Current year: at most €100,000; the turnover that exceeds the threshold is already subject to regular taxation
• Year of formation: at most €25,000, without extrapolation to the full year
• Example of the invoice note: “Gemäß § 19 UStG wird keine Umsatzsteuer berechnet.” (According to § 19 UStG, no VAT is charged.)

Legal basis

§ 19 UStG§ 34a UStDV§ 13b UStG§ 14c UStG

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