Germany's Small Business VAT Exemption (§ 19 UStG): The 2025 Limits and Correct Invoices

What changed in 2025

Until the end of 2024, VAT was simply not collected from small businesses. Since 2025, their supplies are VAT-exempt. That sounds like a technicality, but it has consequences: small businesses now make exempt supplies, and their invoices follow their own simplified requirements under section 34a UStDV.

The limits rose at the same time. The exemption applies if total turnover did not exceed €25,000 in the previous calendar year and does not exceed €100,000 in the current calendar year. Total turnover is calculated on the basis of payments actually received, and advance payments count when they arrive. Sales of fixed assets, such as your old company car, are left out.

The scheme can now also work across borders. Businesses from other EU member states can apply for the German exemption, and German small businesses can use a special notification procedure under section 19a UStG to apply the small-business schemes of other member states.

• Previous year: total turnover no more than €25,000
• Current year: total turnover no more than €100,000
• Counted on payments actually received

Crossing the limit: immediately, not next year

The most important practical change concerns the €100,000 limit. Previously, a forecast for the whole year decided. Now the exemption ends with exactly the supply that pushes your current-year turnover over the limit. The BMF is explicit that this supply is already fully subject to VAT. From that point on, the normal obligations apply as well, including advance VAT returns.

If you exceeded €25,000 in the previous year, you are not a small business in the current year at all, even if this year's turnover turns out lower. Founders face a special rule: according to the BMF, in the year a business starts, the €25,000 limit applies rather than €100,000, and only the actual turnover of that year counts.

Keep an eye on your turnover throughout the year, especially when a large single order comes in. One job can push you over the limit, and the invoice for it must then already include VAT.

What a small-business invoice must show

Under section 34a UStDV, a small business may issue simplified invoices containing: the full name and address of both you and your customer; your tax number or VAT ID (or the small-business identification number in the EU procedure); the date of issue; the quantity and type of goods or the scope and type of the service; the total amount; and a note that the small-business exemption applies.

According to the BMF, plain wording such as tax-exempt small business is enough for that note, as long as it clearly identifies the exemption; a reference to section 19 UStG is the common choice. A sequential invoice number is not required for small businesses according to the BMF letter of 15 October 2025. It is still a good idea for your own records and for queries, and so is the date of supply.

If you show VAT on an invoice by mistake as a small business, you may owe that amount under section 14c(1) UStG until the invoice is corrected. The BMF makes one exception: a supply actually made to a final consumer does not trigger this tax. The safer course is never to show VAT on your invoices in the first place.

• Name and address of both parties
• Tax number or VAT ID
• Date of issue
• Quantity and type of goods, or scope and type of service
• Total amount and a note on the § 19 UStG exemption

Small businesses and e-invoicing

Invoices from small businesses may always be issued as an other invoice under section 34a UStDV, meaning paper or PDF, even after the e-invoicing transition ends in 2028. You may still send e-invoices voluntarily, for example because a large customer asks for them.

Receiving is a different matter: like every other business established in Germany, small businesses have had to be able to receive e-invoices since 1 January 2025. An email inbox is enough; what matters is that you can open the XML file and keep it unaltered.

Opting out, input VAT, and an invoice in a few minutes

Small businesses cannot deduct input VAT on purchases they use for their exempt supplies. If you invest heavily or sell mainly to businesses that can reclaim VAT, regular taxation is often the better deal. You opt out by declaring it to the tax office, at the latest by the end of February of the second year after the year concerned, and the decision binds you for at least five calendar years. Run the numbers with a tax adviser first.

In Toolula's Invoice Generator, choose the Invoice document type, enter your name, address and tax number under My details (From), and the customer under Client details (Bill to). The Small business — § 19 UStG switch removes VAT from every line and adds a note stating that no VAT is charged in accordance with section 19 UStG.

A checklist shows Required details complete, or lists under Missing what is still open, such as Tax number or VAT ID. Put the date or period of supply in the line description or under Notes / payment terms. Remember my details in this browser keeps your sender block for next time, and Download PDF produces the finished invoice, entirely in your browser.

Frequently asked questions