The small business scheme under § 19 UStG lets small businesses in Germany invoice without VAT. It was fundamentally reformed on 1 January 2025. Here are the key points.
The new thresholds
You can use the scheme if
- your total turnover in the previous year did not exceed €25,000 and
- your total turnover in the current year does not exceed €100,000.
The thresholds refer to net amounts. Before 2025, the limits were €22,000 (previous year) and a forecast limit of €50,000 for the current year.
What’s new about the €100,000 limit?
Previously, a forecast at the start of the year was decisive. Since 2025, the €100,000 limit is a hard limit: as soon as your turnover in the current year exceeds €100,000, the scheme ends immediately. The very transaction that crosses the threshold is already subject to standard VAT.
Example: your turnover in 2025 was €23,000; in October 2026 you’re at €96,000. You then issue an invoice for €6,000 net. With this transaction you cross €100,000 – so this invoice must already include VAT, as must all following ones.
What applies to founders?
In the year you start your business, a limit of €25,000 applies to the current year. If it is exceeded, the scheme also ends immediately with the transaction that crosses the limit.
Exempt instead of “not charged”
Since 2025, small businesses’ sales are VAT-exempt. In practice little changes for you: you don’t show VAT, and in return you cannot deduct input VAT from supplier invoices.
What goes on the invoice
Your invoices need a note on the exemption, for example:
Gemäß § 19 UStG wird keine Umsatzsteuer berechnet.
No fixed wording is prescribed. Since 2025, simplified invoice requirements apply to small businesses. For what an invoice should generally contain, see our checklist of mandatory details.
Further reliefs and obligations
- E-invoicing: small businesses are exempt from issuing e-invoices but must be able to receive them.
- Annual VAT return: small businesses generally no longer have to file one unless the tax office requests it.
- EU small business scheme: since 2025, German businesses can, under certain conditions, use the small business exemption in other EU countries too. This requires participation via the Federal Central Tax Office (BZSt).
Opting out
You can voluntarily opt out of the scheme, e.g. if you invest heavily and want to deduct input VAT. You are then bound by this choice for at least five calendar years.
Small businesses with Chingvoice
In Chingvoice you activate the small business scheme once in the settings – every invoice then automatically gets the right note and no VAT. Guide · Chingvoice for small businesses