Kleinunternehmer 2025 Guide – rules, VAT & taxes explained

Happy Diana, Chief Hapiness Officer
Happy Diana, Chief Hapiness Officer

Diana

Updated on:

May 13, 2025

Small business owner working on the first project
Small business owner working on the first project
Small business owner working on the first project

What is a Kleinunternehmer?

A Kleinunternehmer is a business whose German turnover stayed below 25.000 € last year and is expected to remain under 100.000 € this year. Under § 19 UStG, Kleinunternehmer may issue invoices without VAT, skip VAT returns, and focus on income tax only.


Eligibility rules 2025 (§ 19 UStG)

From 1 January 2025, the Kleinunternehmer have two net‑turnover thresholds instead of the previous 22k€/50k€ gross pair. Understanding these limits is the first step to see whether you can skip German VAT.

Threshold

Period it looks at

What it means

25.000 € (net)

Last calendar year

If your German‑taxable turnover in 2024 did not break 25k €, you pass the first hurdle.

100.000 € (net)

Current calendar year

As long as your running 2025 turnover is expected to stay below 100k €, you keep the status. The moment that limit is exceeded, VAT must be added to the next invoice.

🇩🇪 Only sales that would normally carry German VAT count. EU‑wide B2C digital sales and exempt income do count; pure exports outside the EU and one‑off asset disposals don’t.


How the two‑step test works in practice

  1. Look back: Check the actual turnover of the previous year. If it was 25.000 € or less → proceed.

  2. Look forward: Forecast your net turnover for the current year.

    • If the forecast is ≤ 100.000 € → you remain a Kleinunternehmer all year.

    • If the forecast is > 100.000 € → you cannot apply the rule at all.

  3. Real‑time guardrail: Even with a clean forecast, the moment the running total hits 100.000 €, you switch to standard VAT for the very next sale (no grace period).

Scenario

2024 net turnover

2025 forecast

Status on 1 Jan 2025

What happens during the year

Freelancer, steady growth

18 k €

38 k €

Kleinunternehmer

Stays in regime all year

Online shop scaling fast

20 k €

92 k €

Kleinunternehmer

If actuals reach 100 k € on 7 Sep, VAT must appear on invoices from 8 Sep onward

Consulting firm

29 k €

40 k €

Not eligible (failed look‑back)

Must register for VAT from day 1


Automatic Kleinunternehmer status for 2025 start‑ups

A legislative gap in § 19 UStG means that every business founded on or after 1 January 2025 starts life as a Kleinunternehmer by default. You hold the status until:

  • Your in‑year turnover exceeds 100.000 €, or

  • your first full calendar year pushes the look‑back figure above 25.000 €.

Founders’ checklist

  1. Complete the “Fragebogen zur steuerlichen Erfassung”. Leave the VAT‑option boxes blank unless you want to charge VAT from the outset.

  2. Plan big purchases? Consider opting out immediately (binding for 5 years) to reclaim input VAT.

  3. Watch the meter: Use accounting software that flags when you approach 100.000€.

Quick self‑test

✅ 2024 turnover ≤ 25 000 €
✅ 2025 forecast ≤ 100 000 €
✅ No single invoice will push you past 100 000 € mid‑year

Tick all three? You meet the 2025 Kleinunternehmer eligibility—and can forget about German VAT, at least for now.


Why do Kleinunternehmer pay no VAT?

The short answer: § 19 UStG of the German tax code exempts very small businesses from acting as the state’s tax collector so they can focus on running (and growing) their venture.

The legal logic

  • EU small-business scheme – European law lets member states free micro-businesses from VAT when the admin cost outweighs expected revenue. Germany implements this via § 19 UStG.

  • Administrative relief – Without VAT, you can skip monthly or quarterly returns, advance payments, and the complex place-of-supply rules—huge time savers for side hustlers and first-time founders.


We have a dedicated article on why not to become a Kleinunternehmer. Here's the summary:

If you apply § 19 UStG

If you opt out and charge VAT

✅ Invoice without 19 % / 7 % VAT 

✅ No VAT returns or pre-payments 

✅ Lower headline prices for private customers

✅ Can reclaim input VAT on laptops, software, rent 

✅ B2B clients can deduct the VAT you charge 

✅ No sudden price jump when you outgrow the limits

Cannot deduct VAT on your own expenses—so every purchase is ~19 % pricier

❌ Must track and remit VAT; more bookkeeping

❌ Price perception can hurt with B2B buyers (they lose their deduction)


Rule of thumb: If most of your customers are private individuals and your startup costs are modest, the exemption usually wins. Heavy upfront investments or mainly B2B sales? Opt for regular VAT.


Practical example

You buy a graphics tablet for 1.000 € + 190 € VAT.

  • As a Kleinunternehmer, you pay 1.190 €—full stop.

  • As a regular VAT payer, you can claim back 190 € on your next return, so the net cost is 1.000 €.

Over a handful of receipts, this barely matters; outfit an entire studio, and the difference becomes real.


Pros & Cons of becoming a Kleinunternehmer

Advantages

⚠️ Trade-offs

Lower sticker prices – invoices show no 19%/7% VAT, so private customers see the net amount only.

No input-VAT refund – every laptop, SaaS fee or rent invoice is ~19% more expensive because you can’t reclaim the tax.

Minimal paperwork – skip monthly VAT returns, advance payments and complex EU place-of-supply rules.

B2B perception – business clients lose their own VAT deduction and may see the status as “too small to scale”.

Simpler bookkeeping – no need to track VAT codes or reconcile pre-tax vs. sales tax.

Sudden price jump – the day you cross 100k € turnover, VAT must be added to the next invoice, potentially shocking loyal customers.

Stable cash-flow – you never act as an unpaid tax middle-man for the state.

5-year lock-in – if you opt out voluntarily to reclaim VAT, you’re tied to regular VAT for at least five years.

Quick rule of thumb:
Mostly private clients + small startup costs → stay Kleinunternehmer.
Mostly B2B clients or large equipment spend → consider regular VAT from day one.


How to register (or opt out) with the Finanzamt

Filling the Fragebogen zur steuerlichen Erfassung on ELSTER is where you claim – or deliberately waive – the Kleinunternehmer scheme. The key action happens on page 17 “Umsatzsteuer” of the online form.


Step-by-step: claim the scheme in 10 minutes

Step

What you see in ELSTER

What to do

1

Dashboard → Formulare & LeistungenAlle FormulareFragebogen zur steuerlichen Erfassung für Einzelunternehmen

Open the questionnaire and pick your local Finanzamt.

2

Pages 1-16 (basic data)

Work through address, bank, business description, etc.

3

Page 17 – “Angaben zur Anmeldung der Umsatzsteuer”

• In field 122 enter your estimated net turnover for the current year.

Field 123 – tick the first box to apply the Kleinunternehmer rule.

4 (opt-out)

Same page, field 124

Tick here only if you want to waive the rule and charge VAT from day 1. This decision locks you into regular VAT for a minimum of five calendar years.

5

Final page

Review and send. ELSTER issues a PDF receipt—download it.

⏩ As of 1 January 2025, every new business is treated as a Kleinunternehmer by default. You still complete the questionnaire, but if you leave fields 123/124 untouched, the status applies automatically until you hit the 100k € ceiling or a later year pushes you over 25k €.


Submitting the Fragebogen in a zero-stress mode

Wish it were simpler? With Norman’s free wizard, you can file the entire “Fragebogen zur steuerlichen Erfassung” in about 8 minutes—no ELSTER account required.

How it works in three clicks

  1. Sign up with email – no certificates.

  2. Answer plain-English questions – Norman maps them to the exact ELSTER fields.

  3. Hit “Submit to Finanzamt” – the software signs and transmits the XML in the background; a stamped PDF receipt lands in your inbox.


Automatic Kleinunternehmer threshold calculation


Why freelancers love Norman

  • Automatic Kleinunternehmer check – enter expected monthly sales; the wizard extrapolates, warns if you tip over the new 100k € ceiling, and explains consequences.

  • Completely free.

  • Explanations on every field – hover icons display a one-line summary plus “learn more” links for deeper reading.

  • Instant confirmation – PDF stamped with the tracking ID and submission date.

⚡ Use Norman even if you have already opened an ELSTER account—it’s still much simpler and less stressful.


Changing the status

Situation

Action

Effect

You outgrow 100k € in the year

Start showing VAT on the very next invoice; register for a USt-IdNr if you haven’t already.

Mandatory switch, no binding period.

You voluntarily opt-out at the registration (field 124)

Submit the questionnaire with the waiver checked.

Bound to regular VAT for 5 years; may re-apply for Kleinunternehmer afterwards if under the limits.

You stayed Kleinunternehmer but want VAT later

Send a one-sentence letter/e-mail to the Finanzamt: “I waive § 19 UStG from <date>.”

Same 5-year binding rule starts on the chosen date.


After submitting the form, the Finanzamt will assign your tax number. If you opted for regular VAT, you’ll also receive a USt-IdNr within a few weeks. Keep that letter handy – you’ll need it on every invoice.

❗ You can request a VAT number even if you are a Kleinunternehmer. The number won’t change your VAT liability, but it will enable you to work with clients in the EU, so we highly recommend requesting it.


🎁 Free e-book for new self-employed

Kick-start your freelance business with a complete guide to self-employment (PDF). Inside you’ll find:

  • All German self-employment types explained

  • Deep dive into the Kleinunternehmer rule

  • Accounting basics you can master in an afternoon

  • Printable “first-90-days” checklist to keep registrations on track

  • 2025 tax calendar with every key deadline highlighted

  • One-page tax-deduction cheatsheet so you never miss a write-off

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The data is provided for advertising purposes in exchange for downloading service offers (including templates and eBooks). I agree that Norman will inform me about accounting topics (news, promotions, webinars) in the future through email and social media advertising. Additional information on the processing of personal data can be found in the privacy policy.

Tax timeline: When must a Kleinunternehmer file taxes?

Unlike regular VAT traders, Kleinunternehmer have only one statutory tax return a year—the income-tax package that includes their EÜR (cash-basis profit report). Some self-employed must make quarterly income tax advance payments. Who and how much to pay is decided by the Finanzamt.

Quarter

Statutory deadline*

Q1 income-tax pre-payment

10 March

Q2 income-tax pre-payment

10 June

Q3 income-tax pre-payment

10 September

Q4 income-tax pre-payment

10 December

*When the 10th falls on a weekend/holiday, the deadline shifts to the next working day.


Annual filings

Return

What it contains

Regular deadline (self-filed)

With tax adviser

Income-tax return (Einkommensteuererklärung)

Personal data + EÜR attachment (Form “Anlage EÜR”)

31 July of the following year (e.g. 2024 income → 31 July 2025)

End of February of the second following year (e.g. 2024 income → 28 Feb 2026)

Trade-tax return (Gewerbesteuer)

Only if you run a trade (Gewerbetreibende, not a Freiberufler)

Same dates as above

Same dates

VAT

None – Kleinunternehmer are exempt from monthly/annual VAT returns since 2024. Exception: a reverse-charge invoice forces a one-off VAT return for that period.

n/a

n/a


Important extra reminders

  • Reverse-charge or EU OSS sales? File the specific VAT declaration by the 10th of the month following the transaction.

  • Health-insurance certificate: many Krankenkassen ask for the prior-year profit figure by 30 April; your draft EÜR usually suffices.

  • Keep records for 8 years even though you don’t file VAT returns.

Bottom line: Mark 10 March, 10 June, 10 September, 10 December for any pre-payments, and circle 31 July for the annual return. Staying ahead of these five dates keeps a Kleinunternehmer fully compliant with the Finanzamt.


Where to report Kleinunternehmer income on the tax return

First stop: Anlage EÜR

What goes where

Exact line / field

Total sales as a Kleinunternehmer – use the gross invoice amounts, because you never separated VAT

Line 12 “Betriebseinnahmen als umsatzsteuerlicher Kleinunternehmer (§ 19 Abs. 1 UStG)” 

All other operating income (asset sales, private car use, etc.)

Lines 16–23 of the EÜR (same as regular traders)

Operating expenses

Enter gross figures throughout – you have no input-VAT to deduct 

No extra checkbox is needed: once revenue sits in line 12, the Finanzamt knows you applied § 19 UStG and expects no VAT return for that year.


Transfer the profit, not the revenue

After the EÜR is finished, you report only the bottom-line profit or loss in your personal income tax form:

If you are …

Form

Line

Freelancer / liberal profession

Anlage S

Line 4 – first activity (additional ones in line 5) 

Trader / sole-proprietor business

Anlage G

Line 4 – first business (further ones lines 5–6) 

There is no dedicated Kleinunternehmer tick-box inside Anlage S or G; the Finanzamt reconciles your profit with the EÜR you attached.


Typical filing flow

  1. Prepare EÜR → ensure all sales are listed in line 12.

  2. Copy profit into Anlage S (line 4) or Anlage G (line 4).

  3. Attach it to your Einkommensteuer return (deadline 31 July, or end-February with a tax adviser).

  4. Reverse-charge exception: if you had a one-off reverse-charge invoice (e.g., Google Ads), file a single-month VAT return – it doesn’t affect EÜR positions.


🤖 Norman automatically pre-fills the EÜR and income tax declarations so you don't have to guess how to calculate individual fields. Try it now for free.


How much tax will I pay as a Kleinunternehmer?

Even without VAT, you still face income tax (plus, sometimes, trade tax). Here’s the maths you need and a quick way to check your own bill.

Income tax (Einkommensteuer) – 2025 brackets

Slice of taxable income (single filer)

Marginal rate

0 € – 12.096 €

0 % – the Grundfreibetrag keeps this part tax-free. 

12.097 € – 17.443 €

14 % → 24 % (smooth progression)

17.444 € – 68.480 €

24 % → 42 % (main bracket)

68.481 € – 277.825 €

42 % flat

≥ 277.826 €

45 % (“Reichensteuer”)

Source: § 32a EStG, version 2025. 

How it’s applied

  1. Profit = income – expenses from your EÜR.

  2. Subtract any deductions (health insurance, pension, etc.).

  3. Plug the remaining taxable income into the table above.

  4. Add a 5.5 % solidarity surcharge only if your income tax bill tops ~19.950 € (singles). 

Example: Profit 30.000 € → taxable 30.000 €. Rough calculation gives ≈ 4.200 € income tax + 0 € soli → effective rate ≈ 14%.


Trade tax (Gewerbesteuer) – only after 24.500 € profit

Freelancers and agriculture are exempt. Everyone else (sole trader, GbR, UG, GmbH) gets a 24.500 € annual allowance; anything above that is taxed:

  1. (Profit – 24.500 €) × 3.5 % = “Steuermessbetrag”

  2. Multiply by your town’s Hebesatz (e.g., 400 %).

A 35.000 € profit in a city with a 400 % rate:
(35.000 – 24.500) × 3.5 % = 367,50 € × 400 % → 1.470 € trade tax, which the income-tax bill later credits in full or part. 


No VAT, no input tax refund

Remember, § 19 UStG saves you from charging VAT but makes every purchase 19 % more expensive (see section 2). Plan big investments accordingly.


Rule of thumb

  • Profit under 12.096 € → 0 € income tax, 0 € trade tax.

  • Profit 20.000 € (freelancer) → ~1.100 € income tax, no trade tax.

  • Profit 40.000 € (sole trader, Hebesatz 350 %) → ~5.900 € income tax + ~1.400 € trade tax; combined effective ≈ 18%.

Use the calculator to fine-tune for your deductions and location.


Losing (or leaving) Kleinunternehmer status

You can abandon the Kleinunternehmer status at any point.

Trigger

When it happens

What you must do

Binding period

Turnover tops 25.000 € in the preceding calendar year

1 January of the following year

Start invoicing with VAT from day 1 of that year

No lock-in; if revenue later drops below both limits you can return

Turnover hits 100.000 € during the current year

Immediately—VAT applies to the very next invoice (earlier invoices stay VAT-free)

Register (or activate) a VAT number, file regular returns from that month forward

No lock-in; if next year’s revenue stays ≤ 25 000 €, you may revert

Voluntary opt-out (you want input-VAT back)

Any time—by ticking field 124 in the ELSTER questionnaire or sending a one-liner to the Finanzamt

Add VAT on every invoice from the chosen date; submit advance returns

Five full calendar years (§ 19 Abs. 2 UStG)

EU-wide sales exceed 100.000 € (since 2025 the limit is aggregate EU turnover)

The moment you cross 100.000 € across all EU countries

Same as domestic 100 k breach; optionally use OSS for B2C EU sales

Same as above


Immediate switch at 100k €: what changes

  1. Invoice update – add 19 % or 7 % VAT line plus your VAT-ID.

  2. ELSTER – submit a quarterly advance VAT return starting with the period you breached.

  3. Prices – Inform B2C clients early; consider absorbing part of the VAT to avoid sticker shock.

  4. Bookkeeping – Begin capturing input VAT so you can deduct it.

There is no retroactive VAT on invoices issued before you crossed the line. Only forward-looking compliance is required.


Re-entering the scheme

  • Dropped back under 25.000 € in a later year? You regain eligibility automatically on 1 January of the next year—unless you are still inside a voluntary five-year lock.

  • Finished the five years? File a simple letter to the Finanzamt before 31 December requesting a return to § 19 UStG for the coming year.


FAQs & quick answers

Who is Kleinunternehmer?

A Kleinunternehmer is a business whose German, VAT-taxable turnover stayed below 25.000 € net in the previous calendar year and is expected to stay under 100.000 € net in the current year. If both limits are met, § 19 UStG allows you to issue invoices without VAT. 


Why do Kleinunternehmer don’t pay VAT?

Because § 19 UStG implements the EU “small-business” option: for micro-sales, the admin cost of collecting VAT would exceed the revenue it brings, so Germany waives the tax—and, in return, denies the right to reclaim input VAT.


When Kleinunternehmer should file taxes?

Only the annual income tax return (with Anlage EÜR) is mandatory, due 31 July of the following year when you self-file (or end-February of the second year with a tax adviser). Monthly/quarterly VAT returns are not required unless a reverse-charge case arises. 


Where to report Kleinunternehmer income on the tax return

Enter your gross sales in Anlage EÜR, line 12 (“Betriebseinnahmen als umsatzsteuerlicher Kleinunternehmer”). Transfer the resulting profit to Anlage S for freelancers or Anlage G for traders.


How much tax do Kleinunternehmer pay?

You pay income tax only. 0 % up to 12.096 €, then progressive 14%–45%. Trade tax applies only if you run a trade and profit exceeds 24.500 €; freelancers are exempt.

© 2025 Norman AI GmbH

© 2025 Norman AI GmbH

© 2025 Norman AI GmbH