German VAT Thresholds in 2026: Kleinunternehmer, Foreign Firms & the €10,000 EU Line

The Kleinunternehmer exemption (§19 UStG)

The Kleinunternehmer (small-business) scheme is the domestic exemption that lets a small German business skip VAT altogether. It was restructured in 2025, so the figures you may have seen elsewhere are often out of date.

Current 2025 figures vs the obsolete €22k/€50k

From 1 January 2025, you qualify as a Kleinunternehmer if your net turnover was ≤ €25,000 in the previous calendar year AND is ≤ €100,000 in the current calendar year (§19 UStG). The old limits of €22,000 / €50,000 applied only until the end of 2024; any page still quoting them is stale. The reform implements EU Directive 2020/285 through the Annual Tax Act 2024 (Jahressteuergesetz 2024) and the BMF letter of 18 March 2025. Because VAT figures are revised periodically, confirm the €25,000/€100,000 limits at the time you act.

What it means (no VAT, no input deduction, a genuine exemption)

A Kleinunternehmer issues invoices with no VAT and must state the §19 exemption on them; customers pay the net price. The trade-off is that you have no input-VAT (Vorsteuer) deduction: you cannot reclaim the VAT on your own purchases. Since 2025 this is a genuine VAT exemption, not merely a rule that you do not collect the tax, which matters for how invoices and the cross-border procedure work.

New founders + §19a cross-border

From 2025, new founders are automatically treated as Kleinunternehmer if they expect to stay within the limits, with no turnover forecast required. Separately, the new §19a UStG lets a German small business apply the exemption cross-border within the EU via a special reporting procedure, rather than only domestically.

Should you opt in or charge VAT?

Qualifying does not mean you should use the exemption. You can waive it and apply standard taxation instead, but the waiver binds you for 5 years, so it is worth thinking through. The following is general guidance, not advice; route the decision to a licensed Steuerberater.

Can a GmbH or UG be a Kleinunternehmer?

Yes, in principle, and this is the angle most guides miss. The exemption is not limited to freelancers: any Unternehmer under §2 UStG, including a GmbH or UG (haftungsbeschränkt), can qualify within the limits. But it rarely fits a company. Companies are usually B2B and growth-oriented, they carry formation, notary, and accounting input VAT worth reclaiming, and they benefit from a full-VAT professional image. For those reasons, standard taxation (opting out) is the typical default for a GmbH or UG. The exemption is available to a company; it is just seldom the right choice.

Foreign companies, there's no threshold

If your company has no German seat, the answer to "what's my German VAT threshold?" is that there isn't one. Non-resident businesses cannot use the Kleinunternehmer exemption and must register and charge German VAT from the first taxable supply in Germany, regardless of turnover. This catches e-commerce sellers, Amazon-FBA users, and anyone warehousing goods in Germany: the moment you make or store goods for a taxable supply here, registration is due. For the mechanics of registering, see our German VAT registration guide.

Selling B2C across the EU, the €10,000 line

The third line is for cross-border consumer sales. A single EU-wide €10,000 net annual threshold covers B2C cross-border supplies of goods plus TBE (telecom, broadcasting, and electronic) services. Below it, you keep charging German VAT on those sales. Above €10,000, counting all qualifying intra-EU B2C sales together, the place of supply shifts to the customer's country, and you charge the destination rate from the breaching sale, with no grace period.

To report this without registering in every country, use the One-Stop-Shop (OSS): one quarterly EU return filed through the BZSt Online-Portal (BOP). From January 2025, EU-resident sellers may only apply the €10,000 threshold from their country of establishment; stock held in another member state cannot use it. For low-value imported consignments ≤ €150, the Import One-Stop-Shop (IOSS) applies instead.

German VAT rates

When you do charge VAT, two rates cover almost everything (§12 UStG):

• 19% standard rate.
• 7% reduced rate, for most foods, books and e-publications, public passenger transport, short-term accommodation, cultural admissions, and the other supplies listed in Anlage 2.
• 0% for certain residential solar modules (§12(3) UStG).

How often you'll file once registered

Once you charge VAT, you file periodic advance returns (Umsatzsteuer-Voranmeldung) via ELSTER, due by the 10th of the following month. From 2025, frequency depends on your prior-year VAT liability (Zahllast). New businesses generally file quarterly. A Dauerfristverlängerung (permanent extension) pushes each deadline back by one month.

If you want this handled, see accounting and bookkeeping services in Germany.

What happens if you cross €100,000 mid-year

Assessment is on actual net turnover, with no forecast or annualisation. The moment your current-year turnover exceeds €100,000, your business switches immediately to standard taxation. The breaching transaction itself must be invoiced with VAT; there is no grace period. Turnover earned earlier in the year stays exempt, and the €100,000 figure is net. In practice this means watching the running total closely as you approach the limit, so the switch does not catch a large invoice unprepared.