It is Germany's small-business VAT scheme under §19 UStG. If your turnover is small enough, you do not charge VAT on your invoices, you do not file VAT returns, and your bookkeeping gets much simpler. The trade-off: you cannot reclaim the VAT you pay on your own business purchases (input VAT / Vorsteuer). It suits freelancers whose costs are low and whose clients are mostly private individuals who cannot reclaim VAT anyway.

Two limits, both net turnover: prior calendar year €25,000 or less, and current calendar year €100,000 or less (§19 Abs. 1 UStG). Both must hold. The old limits — €22,000 prior year and a €50,000 current-year forecast — were replaced on 1 January 2025. "Net" means excluding VAT, measured by consideration actually received.

You leave the scheme immediately. Unlike the old rules, the €100,000 ceiling is not a forecast you can get wrong in good faith — crossing it ends Kleinunternehmer status in the current year. The turnover up to the crossing point stays VAT-free; the transaction that pushes you over, and everything after, is taxed at 19%. This is why monthly turnover tracking is non-negotiable in a growth year.

You keep the scheme for the current year, but lose it for the next. The €25,000 lower threshold only affects the following year's eligibility (it becomes your prior-year figure). So a €60,000 year is fine VAT-wise this year — but you will be standard-taxed from 1 January of the year after. Plan pricing and invoicing templates ahead of that switch.

Yes, if your expected current-year turnover does not exceed €25,000. With no prior year, only the lower threshold matters at the start. If you start mid-year, annualize your expected turnover (monthly average × 12) for the test. And remember the €100,000 hard ceiling still applies from day one — a surprise big contract ends the status immediately.

Sometimes — mainly for B2B freelancers with significant costs. If your clients are businesses that reclaim VAT, charging 19% costs them nothing net, while opting in lets you reclaim input VAT on equipment, software, and offices. The catch: the voluntary option (Verzicht auf die Steuerbefreiung) binds you for 5 years. Do the maths over the full period, not just this year, and get advice before electing.

For VAT, no — the §19 thresholds are identical. The difference is income and trade tax: Freiberufler (liberal professions like designers, developers, translators, consultants) are exempt from trade tax (Gewerbesteuer), while a Gewerbe pays trade tax on profits above the €24,500 allowance. Classification affects your overall tax bill, not your Kleinunternehmer verdict.

They must not show VAT, and they should reference the exemption. The standard wording cites §19 UStG ("Gemäß § 19 UStG wird keine Umsatzsteuer berechnet"). Your invoices still need the usual mandatory details (names, addresses, invoice number, date, description, amounts). Never show a VAT line "for convenience" — showing VAT you are not entitled to charge creates a tax liability for the shown amount.

The 2025 reform added an EU dimension. Kleinunternehmer status can now also cover businesses resident in other EU member states, and a German Kleinunternehmer can use corresponding schemes in other EU countries — but only through a special notification procedure handled by the Federal Central Tax Office (Bundeszentralamt für Steuern), and only while meeting the German §19 conditions. Cross-border VAT is genuinely complex: get professional advice before invoicing abroad.

Track turnover continuously and keep invoices for 10 years. The hard €100,000 ceiling makes monthly turnover monitoring essential — a spreadsheet that flags you at €80,000 and €90,000 is cheap insurance. Keep all outgoing and incoming invoices; even without VAT returns, the Finanzamt can audit your turnover figures. The cash-flow forecast helps model how a growth year affects your thresholds.

It does not — VAT status and income tax are separate. Kleinunternehmerregelung only concerns VAT. Your income tax (Einkommensteuer) is assessed on profit regardless, and the thresholds here have nothing to do with the income-tax Grundfreibetrag or trade-tax allowances. Many freelancers confuse the €25,000 VAT threshold with income-tax figures — they are unrelated.

No — this is an estimate-only eligibility checker, not professional tax advice. Thresholds were verified against §19 UStG and IHK guidance on 2026-09-25, but German tax law changes, and your facts (cross-border sales, exempt activities, mixed supplies, the 5-year option) can change the answer. Confirm your position with a Steuerberater before changing your invoicing.