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German § 19 UStG: check the 2025 limits, compare with standard VAT
This calculator checks whether you qualify for the German small business VAT exemption (§ 19 UStG, rules from 2025): no more than €25,000 turnover in the previous year and €100,000 in the current year, €25,000 in the start-up year. It then compares the VAT you would owe under standard taxation with your input VAT and shows which option leaves you better off.
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It is the Kleinunternehmerregelung under § 19 UStG: with no more than €25,000 turnover in the previous year and €100,000 in the current year (€25,000 in the start-up year), you don't charge VAT on your invoices, but you can't reclaim input VAT either. With private customers, €20,000 turnover would contain €3,193 VAT at the same prices; against €800 input VAT, the calculator recommends the small business rule.
If you are self-employed or starting a business, one question comes up early on: small business rule (Kleinunternehmerregelung) or standard taxation (Regelbesteuerung)? The answer depends on your turnover, your customers and your expenses. The Small Business Tax Rule Calculator checks whether you stay within the turnover limits and shows which option leaves you better off financially. It applies the German rule under § 19 UStG and is intended for businesses in Germany.
The small business rule under § 19 UStG exempts businesses with low turnover from VAT. Since January 1, 2025, your turnover may be no more than €25,000 in the previous year and no more than €100,000 in the current year, both net. If you were not yet in business in the previous year, your turnover in the start-up year may not exceed €25,000. Until the end of 2024, the limits were €22,000 and €50,000.
Under the small business rule, you do not show VAT on your invoices and do not pay any to the tax office. In return, you cannot reclaim the VAT on your purchases as input VAT (Vorsteuer). Depending on your business model, standard taxation can therefore be the better choice financially – even if you stay within the limits.
The calculator compares both options based on your inputs:
The result appears instantly. The calculation uses the standard VAT rate of 19%; the calculator does not take sales at the reduced rate of 7% into account.
A graphic designer had €18,000 in turnover in the previous year and expects €20,000 this year. Her expenses include €800 in input VAT, and most of her customers are private individuals. She is below both limits. If she switched to standard taxation and kept her prices, she would have to pay €3,193 in VAT out of her €20,000 turnover and would get €800 in input VAT back. The small business rule leaves her with €2,393 more.
An IT consultant had €22,000 in turnover in the previous year, expects €30,000 and pays €2,500 in input VAT, mainly for hardware. His customers are companies that deduct the VAT on his invoices as input VAT themselves. Under standard taxation, he adds VAT to his prices without it costing his customers anything, and gets €2,500 in input VAT back. The calculator recommends standard taxation, even though he would qualify for the small business rule.
Standard taxation is particularly attractive if:
If your turnover in the previous year was above €25,000, you are subject to standard taxation in the current year. If you exceed €100,000 in the current year, the small business rule ends immediately: the very sale that takes you over the limit is already subject to VAT. The same applies in the start-up year above €25,000. There is no longer a forecast as there was until 2024 – what counts is your actual turnover.
Many founders believe the small business rule is always cheaper because it means less bureaucracy. That is true for the paperwork, but financially the picture can look different. Another common misconception is that you can switch at any time: if you waive the small business rule, you are bound by that decision for five calendar years.
This calculator is intended for guidance and initial estimates and does not replace professional tax advice. Special cases such as reduced tax rates, mixed sales or sales abroad are best discussed with a tax advisor. The limits reflect § 19 UStG as amended from 2025.
Since 2025, your turnover may not exceed €25,000 in the previous year or €100,000 in the current year, both net. In the start-up year, the limit is €25,000. Until 2024, the limits were €22,000 in the previous year and an expected €50,000 in the current year.
No. If you use the small business rule, you must not show VAT on your invoices. If you do so anyway, you owe the VAT shown to the tax office – without being able to deduct input VAT. If you want to show VAT, you have to opt out of the rule.
If you voluntarily opt out of the small business rule, you are bound by that decision for five calendar years. After that, you can switch back, provided you stay within the turnover limits.
In that case, standard taxation applies from the sale that takes you over the limit, and from then on you have to charge VAT. Sales made before that remain under the small business rule.
Yes. The small business rule applies to all business owners – whether you run your business full-time or on the side. Only your turnover counts, not how much you work.