What is a Kleinunternehmer?
A Kleinunternehmer ("small entrepreneur") is a self-employed person or freelancer exempt from charging VAT under §19 of the German VAT Act (Umsatzsteuergesetz, UStG). The exemption exists to reduce bureaucratic burden on people running small, early-stage, or side businesses — you don't charge VAT, you don't file monthly VAT returns, and you keep your paperwork simple.
You qualify as a Kleinunternehmer if:
- Your revenue in the previous calendar year was under €22,000 (gross), and
- Your revenue in the current year is not expected to exceed €50,000
In your first year of self-employment, the Finanzamt projects your revenue. If you start mid-year, the €22,000 limit is prorated to the months remaining. For example, starting in July means your limit for that year is roughly €11,000 (6 months out of 12).
How to register as a Kleinunternehmer
There is no separate "Kleinunternehmer registration." It is a box you tick when you first register as self-employed in Germany.
When you submit the Fragebogen zur steuerlichen Erfassung (the tax registration questionnaire) to your local Finanzamt — either on paper or online via Elster — you will be asked whether your expected revenue qualifies you for the Kleinunternehmer exemption. If yes, tick yes.
If you are also required to register a trade (Gewerbe) at the Gewerbeamt, that is a separate step — but the Kleinunternehmer status is still determined by the Finanzamt, not the Gewerbeamt.
Your Finanzamt will issue you a Steuernummer (tax number), which you put on all your invoices. This is all you need — no VAT ID, no monthly returns.
What goes on a Kleinunternehmer invoice
A Kleinunternehmer invoice looks almost identical to a normal invoice — with two important differences: there is no VAT line, and there must be a §19 UStG disclaimer. Here is the exact text required:
Gemäß §19 UStG wird keine Umsatzsteuer berechnet.
Translation: "No VAT is charged in accordance with §19 UStG."
You can place this disclaimer anywhere on the invoice — in the notes section, below the total, or in the footer. It just needs to be present and legible.
You also do not need a Umsatzsteuer-ID (VAT ID) — your Steuernummer from the Finanzamt is sufficient. Do not leave a VAT ID field blank or with a placeholder; simply omit it from the invoice.
Kleinunternehmer vs VAT-registered — which are you?
| Feature | Kleinunternehmer | VAT-registered |
|---|---|---|
| Charge VAT on invoices | No | Yes (19% or 7%) |
| File VAT returns (Umsatzsteuervoranmeldung) | No | Yes (monthly/quarterly) |
| Reclaim input VAT on expenses | No | Yes |
| Need a Umsatzsteuer-ID | No | Yes |
| Invoice disclaimer required | Yes — §19 UStG | No |
| Annual revenue ceiling | €22,000 (prior year) | None |
What happens when you approach the revenue limit
Tracking your cumulative revenue through the year is your responsibility. The Finanzamt will not warn you — they will simply expect VAT returns from the following year if you exceeded the limit.
If you exceed €22,000 in a calendar year: You must switch to VAT registration from 1 January of the following year. Notify your Finanzamt in writing before the year ends. From that point, all invoices must include 19% VAT (or 7% where applicable), and you must file monthly or quarterly VAT pre-declarations (Umsatzsteuervoranmeldung).
If you unexpectedly exceed €50,000 in the current year: The switch is immediate — not from January. You must start charging VAT on invoices from the moment you cross this threshold. This is rare but can catch freelancers off guard during a strong year.
Voluntary switch: You can opt into VAT registration at any time, even if you are below the thresholds. This makes sense if you have significant business expenses with VAT (e.g. equipment, software) and want to reclaim input VAT. The downside: once you opt in voluntarily, you must stay VAT-registered for 5 years.
Kleinunternehmer and international clients
Many English-speaking freelancers in Germany work with clients outside Germany. The good news: your Kleinunternehmer status remains intact regardless of where your clients are located.
Non-EU clients (US, UK, Australia, etc.): VAT does not apply to services exported outside the EU regardless of your registration status. Invoice the net amount with the §19 UStG disclaimer as normal.
EU business clients: Technically, reverse charge rules apply to B2B services supplied across EU borders — meaning the client accounts for VAT in their own country. As a Kleinunternehmer without a VAT ID, you cannot formally apply reverse charge. In practice, most EU business clients will accept your invoice with the §19 disclaimer. If a client specifically requests a VAT ID for their accounting system, you may need to consider voluntary VAT registration.
Note that revenue from international clients counts fully toward your €22,000 threshold — it is not excluded.
Common mistakes
⚠ Charging VAT when you shouldn't
If you add a VAT line to your invoice as a Kleinunternehmer, you legally owe that amount to the Finanzamt — even if your client never paid it. Remove all VAT lines entirely.
⚠ Missing the §19 disclaimer
Without the disclaimer, your invoice is technically non-compliant. Your client may reject it or request a corrected version before paying.
⚠ Exceeding the threshold without noticing
Track your cumulative revenue carefully. Once you exceed €22,000 in a year, you must switch to VAT from the following year. Exceeding €50,000 in the current year triggers an immediate switch.
⚠ Using a Umsatzsteuer-ID you don't have
Don't invent or leave a placeholder VAT ID field. As a Kleinunternehmer, you simply don't have one — use your Steuernummer instead.
⚠ Forgetting to keep invoices
German law requires you to store all issued invoices for 10 years, accessible and unalterable. Digital PDFs are fine if you don't edit them after issuing.
Frequently asked questions
Do I need to register as a Kleinunternehmer separately?
No separate registration is needed. When you register as self-employed (via the Fragebogen zur steuerlichen Erfassung), the Finanzamt will ask if you want to apply for Kleinunternehmer status. Tick yes if you qualify.
Does Kleinunternehmer status affect my income tax?
No. §19 UStG is about VAT only. You still pay income tax (Einkommensteuer) on your profit regardless of Kleinunternehmer status. You still submit an annual Einkommensteuererklärung.
Can I invoice in English as a Kleinunternehmer?
Yes — invoices can be in English. The §19 UStG disclaimer is usually kept in German (or bilingual) to avoid any ambiguity with clients' accountants. All other fields can be in English.
What if my client refuses to pay without a VAT ID?
Some large corporate clients have invoicing systems that require a VAT number. If this becomes a recurring issue with EU clients, voluntary VAT registration may be the pragmatic solution — you'd get a Umsatzsteuer-ID and can apply reverse charge properly.
Can I still deduct business expenses as a Kleinunternehmer?
Yes, for income tax purposes. You deduct your business expenses (equipment, software, home office portion, etc.) to calculate your taxable profit. However, you cannot reclaim the VAT portion of those expenses — that benefit is only available to VAT-registered businesses.
How long do I keep invoices?
German law requires you to keep all invoices for 10 years (GoBD compliance). Digital copies are acceptable if they are unalterable and retrievable.
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