Kleinunternehmer 2025 Guide – rules, VAT & taxes explained
Diana
Updated on:
May 13, 2025
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
Look back: Check the actual turnover of the previous year. If it was 25.000 € or less → proceed.
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.
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
Complete the “Fragebogen zur steuerlichen Erfassung”. Leave the VAT‑option boxes blank unless you want to charge VAT from the outset.
Plan big purchases? Consider opting out immediately (binding for 5 years) to reclaim input VAT.
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 & Leistungen → Alle Formulare → Fragebogen 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
Sign up with email – no certificates.
Answer plain-English questions – Norman maps them to the exact ELSTER fields.
Hit “Submit to Finanzamt” – the software signs and transmits the XML in the background; a stamped PDF receipt lands in your inbox.
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
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
Prepare EÜR → ensure all sales are listed in line 12.
Copy profit into Anlage S (line 4) or Anlage G (line 4).
Attach it to your Einkommensteuer return (deadline 31 July, or end-February with a tax adviser).
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
Profit = income – expenses from your EÜR.
Subtract any deductions (health insurance, pension, etc.).
Plug the remaining taxable income into the table above.
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:
(Profit – 24.500 €) × 3.5 % = “Steuermessbetrag”
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
Invoice update – add 19 % or 7 % VAT line plus your VAT-ID.
ELSTER – submit a quarterly advance VAT return starting with the period you breached.
Prices – Inform B2C clients early; consider absorbing part of the VAT to avoid sticker shock.
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.