German small business rule 2025/2026: the new limits
In short
Since 2025: if your turnover was at most €25,000 in the previous year and stays below €100,000 in the current year, you can invoice without VAT (§ 19 UStG).
What is the small business rule?
Small businesses (Kleinunternehmer) issue invoices without VAT and do not pay VAT to the tax office. This makes bookkeeping much simpler.
The limits since 2025
- previous year turnover: at most €25,000
- current year turnover: at most €100,000
If you exceed €100,000 in the current year, the rule no longer applies from the transaction that crosses the limit.
What must the invoice say?
A note such as “No VAT is charged in accordance with § 19 UStG.” All other mandatory details, such as your tax number and the service period, still apply.
Income tax still applies
The rule only concerns VAT. You still pay income tax on your profit once it exceeds the basic tax-free allowance.
Frequently asked questions
Do I have to apply for it?
You choose it in the tax registration questionnaire.
Does it apply to EU citizens?
Yes, if the business is based in Germany.
Sources
This article is for general information only and does not replace tax or legal advice.
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