Kleinunternehmerregelung (§ 19 UStG)

What the Kleinunternehmerregelung is

The Kleinunternehmerregelung in § 19 UStG is Germany's small-business scheme for VAT. Businesses whose turnover stays below statutory thresholds do not charge VAT on their sales. Since the 2025 reform (Jahressteuergesetz 2024) these sales are formally VAT-exempt; before that, VAT was merely "not levied". The scheme is optional — a small business may waive it and opt into regular taxation, and that waiver binds it for five years.

The thresholds since 2025

The earlier thresholds (22,000 € previous year, 50,000 € projected) still matter when reviewing pre-2025 periods. Since 2025 a separate EU small-business scheme also lets qualifying businesses extend comparable treatment to other member states, subject to an EU-wide 100,000 € ceiling and a registration procedure.

Consequences

A Kleinunternehmer issues invoices without VAT and should state the reason for the missing VAT on the invoice. In return there is no input-tax deduction — VAT paid on purchases is simply a cost. Whether the scheme is a benefit depends on the customer base: for consumer business it often is; in B2B, where clients deduct input tax anyway, waiving it can be more attractive.

In agency practice

Many newer or part-time creators are Kleinunternehmer, and that status directly shapes agency payouts: a self-billing credit note (Gutschrift) to a Kleinunternehmer creator must not show VAT. VAT shown incorrectly can be owed to the tax office simply because it appears on the document (§ 14c UStG), so the creator's VAT status has to be captured during onboarding and checked before every payout run — statuses change as creators grow. Agencies should also watch creators approaching the thresholds, because the switch to regular taxation changes payout amounts and document wording mid-relationship. The details, particularly around the year of transition, are a matter for the creator's tax advisor.