tax
Kleinunternehmerregelung
Also known as: Small business regulation, §19 UStG
The Kleinunternehmerregelung (§ 19 UStG) lets German businesses with prior-year revenue under €22,000 (and current-year projected under €50,000) skip charging Umsatzsteuer (VAT) entirely — simplifying paperwork at the cost of Vorsteuer deductions.
In 30 seconds
- Threshold: Prior year ≤ €22,000 + current year projected ≤ €50,000
- Effect: No VAT charged on invoices, no monthly Voranmeldung
- Trade-off: No Vorsteuer (input VAT) deductions on business expenses
- Required note on invoices: “Kein Ausweis der Umsatzsteuer aufgrund Anwendung der Kleinunternehmerregelung gemäß § 19 UStG”
- Opt-out: Possible — binding for 5 years
When it makes sense
The Kleinunternehmerregelung is great if:
- You have low business expenses (no VAT to reclaim anyway)
- Your customers are private individuals (B2C — they can’t deduct VAT either)
- You want simpler bookkeeping
It’s a bad idea if:
- Your customers are businesses (B2B — they’d rather see VAT they can deduct)
- You have high business expenses (you’d lose meaningful Vorsteuer)
- You’re close to the €22,000 threshold and growing fast
How the threshold works (2026 rules)
Two conditions must both hold:
- Prior year revenue ≤ €22,000
- Projected current year revenue ≤ €50,000
If you exceed €22,000 in any year, you become VAT-liable starting January 1 of the following year — not retroactively.
Filing under Kleinunternehmerregelung
- Issue invoices without VAT
- Add the legally required note (see above)
- File a single annual Umsatzsteuererklärung
- No monthly/quarterly Voranmeldung needed