Germany has special VAT regulations for small businesses, known as “Kleinunternehmerregelung.” These regulations allow entrepreneurs with lower turnover to benefit from a simplified tax regime. The limits have been amended several times in recent years, and a major update awaits from 2025.
Turnover limits 2019-2025
Below are the changing turnover limits for small entrepreneurs in Germany:
| Year | Maximum turnover in the previous year | Maximum turnover in the current year |
|---|---|---|
| 2019 | 17 500 € | 50 000 € |
| 2020 | 22 000 € | 50 000 € |
| 2021 | 22 000 € | 50 000 € |
| 2022 | 22 000 € | 50 000 € |
| 2023 | 22 000 € | 50 000 € |
| 2024 | 22 000 € | 50 000 € |
| 2025 | 25 000 € | 100 000 € |
What is changing from 2025?
- Net turnover: starting in 2025, the limits refer to net value, i.e. without VAT included.
- Exceeding the limit: Exceeding a turnover of €100,000 in the current year results in the automatic loss of small business status from the moment of exceeding and the obligation to apply standard VAT rules.
- Harmonization with EU law: The new regulations are in line with EU Directive 2020/285, which allows entrepreneurs from other EU countries to use the simplified system as well.
Why are these changes important?
The increase in limits increases the number of entrepreneurs who can take advantage of simplified VAT accounting rules. This means less paperwork and lower administrative costs, which is particularly important for micro-enterprises and those operating on a smaller scale.
