What is the Kleinunternehmer threshold in 2026?

The revenue limit is €25,000 in the previous year and an estimated €100,000 in the current year. If you stay below both, you don't need to charge VAT (Umsatzsteuer).

What happens if I exceed the threshold?

If your previous year revenue exceeds €25,000, you lose Kleinunternehmer status from the following year. You must then charge VAT on invoices and file VAT returns.

Do Kleinunternehmer need to file a tax return?

Yes. You're only exempt from VAT, not income tax. You must file an EÜR (income vs. expenses statement) and an income tax return.

Can I voluntarily opt out of Kleinunternehmerregelung?

Yes, by opting for standard taxation (§ 19 Abs. 2 UStG). This makes sense if you have high business expenses with deductible VAT. Note: you're bound to this choice for 5 years.

Is the threshold based on gross or net revenue?

For Kleinunternehmer, it's based on gross revenue (total income), since you don't charge VAT and there's no difference between gross and net.

Small Business Tax Threshold Germany 2026

Kleinunternehmerregelung 2026: The Complete Guide

If you’re self-employed or freelancing in Germany, the Kleinunternehmerregelung (small business regulation) can save you significant paperwork. But there’s a catch: you need to stay below the revenue threshold. Here’s everything you need to know for 2026.

In short: The Kleinunternehmerregelung (§ 19 UStG) applies if your revenue was below €25,000 in the previous year and is expected to stay below €100,000 in the current year. You don’t have to charge VAT (Umsatzsteuer).

🧮 Calculate now: Use our free Small Business Calculator to compare Kleinunternehmer vs. standard taxation.

What Is the Kleinunternehmerregelung?

The Kleinunternehmerregelung (small business regulation) under § 19 UStG exempts you from charging VAT (19% or 7%) on your invoices and paying it to the Finanzamt (tax office).

In practice, this means:

You write invoices without VAT
You don’t file VAT returns (Umsatzsteuer-Voranmeldungen)
But you also can’t reclaim VAT (Vorsteuer) on your business purchases

Revenue Thresholds for 2026

Threshold	Amount	Reference Period
Previous year revenue	max. €25,000	Total revenue in 2025
Current year estimate	max. €100,000	Expected revenue in 2026

What Counts as Revenue?

All taxable income from your self-employed activity
Not included: tax-exempt revenue (e.g., certain medical treatments), sale of business assets

First Year of Business: Special Rule

In your founding year, your revenue is extrapolated to 12 months. If you start on July 1 and earn €15,000 by year-end, the Finanzamt calculates: €15,000 × 12/6 = €30,000 — you exceed the threshold.

Advantages of Kleinunternehmer Status

Less bureaucracy — no VAT returns to file
Simpler invoices — no VAT calculation needed
Price advantage for private clients — your prices are lower for end consumers because no 19% VAT is added
Less admin work — no tracking of input VAT (Vorsteuer)

Disadvantages of Kleinunternehmer Status

No input VAT deduction — you bear the full VAT on your purchases (e.g., laptop, software)
Perception — some business clients prefer invoices with VAT displayed
Expensive investments — for big purchases, you miss out on the Vorsteuer refund

Rule of thumb: Kleinunternehmer status works best when you sell mainly to private customers and have low business expenses. With high investments or B2B clients, standard taxation may be more beneficial.

What Happens When You Exceed the Threshold?

Previous Year Exceeded

If your 2025 revenue was above €25,000, you lose Kleinunternehmer status from 2026:

From January 2026, you must charge VAT on invoices
You must file VAT returns (monthly or quarterly)
You can now reclaim input VAT (Vorsteuer) on purchases

Current Year Exceeded

If you exceed the €100,000 threshold during the current year, Kleinunternehmer status ends immediately — not at the end of the year.

Your Obligations as a Kleinunternehmer

Even as a Kleinunternehmer, you have tax obligations:

Income tax return (Einkommensteuererklärung) — your profit is taxed normally
EÜR (income vs. expenses statement) — filed with your tax return
Invoice requirements — invoices must include: “Gemäß § 19 UStG wird keine Umsatzsteuer berechnet” (No VAT charged per § 19 UStG)
Document business expenses — keep receipts for 10 years

Example Calculation

Scenario: Anna is a graphic designer, Kleinunternehmer, 2025 revenue: €22,000.

	Kleinunternehmer	Standard Taxation
Invoice to client	€1,000	€1,190 (incl. 19% VAT)
VAT to Finanzamt	€0	€190
Laptop purchase (gross)	€1,190 (full cost)	€1,190 − €190 input VAT = €1,000
Admin effort	EÜR + income tax	EÜR + income tax + VAT returns

Anna saves on VAT paperwork but pays the full laptop cost out of pocket.

How Restio Helps

With Restio, you always know where you stand with the Kleinunternehmer threshold:

Real-time revenue monitoring — the Financial Watchdog warns you as you approach the €25,000 limit
Automatic calculation — see at any time how much revenue you can still earn before hitting the threshold
Deadline tracking — reminders for all tax dates
Purchase decisions — ask Restio whether switching to standard taxation would benefit you

Try Restio free for 14 days — and never accidentally exceed a threshold.