What are the VAT registration thresholds for small businesses in Germany?

Germany's Kleinunternehmerregelung under §19 UStG exempts small businesses from charging and remitting Umsatzsteuer (VAT) if their turnover meets certain thresholds. For tax years from 2024 onwards, the turnover in the previous calendar year must not have exceeded €22,000 (raised from €17,500), and the expected turnover in the current calendar year must not be expected to exceed €50,000 (raised from €50,000 previously set limit).

In practice, this means: if your 2023 revenue was below €22,000 and your 2024 projected revenue is below €50,000, you can apply the Kleinunternehmerregelung in 2024. Invoices must include a note that VAT is not charged in accordance with §19 UStG; you must not show any VAT amount on the invoice. As a Kleinunternehmer, you also cannot reclaim input VAT on your business purchases, which may make the exemption less attractive if you have significant capital expenditures.

Once you exceed the annual threshold, you must register for regular VAT and begin charging 19% (or 7% for reduced-rate goods and services) on all invoices. You then file Umsatzsteuervoranmeldungen (advance VAT returns) electronically via ELSTER, typically monthly for the first two years then quarterly if your annual VAT liability is below €7,500. You can voluntarily opt out of the Kleinunternehmerregelung at any time if it is more beneficial, and you are then bound by the regular VAT rules for at least five years.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.