Small business limit exceeded in Germany: what happens now?

If your total turnover last year was over €25,000 (but not over €100,000), you generally switch to standard taxation at the start of the current year. If you exceed €100,000 in the current year, or €25,000 in the founding year, the small business scheme ends immediately: the sale that crosses the limit is already subject to standard taxation in full.

Last updated: 27 October 2026

In short

Earlier sales: sales whose payment you received before exceeding the limit stay exempt.
Afterwards: you declare the tax in advance VAT returns and can claim input VAT.
Invoices: under standard taxation, the tax rate and the tax amount belong on the invoice.

What happens if I exceed €100,000 in the current year?

According to the Finanzamt Hessen, exceeding the turnover limit for the current calendar year ends the small business scheme immediately and means a switch to standard taxation. If the limit is exceeded, the sale that exceeds it is already subject to standard taxation. This also applies to all later sales. The earlier VAT-exempt sales stay exempt. If you made a sale before exceeding the limit but receive the payment only afterwards, that sale is subject to standard taxation too (section 19.7 (1) UStAE).

This follows from the law: a sale is VAT-exempt only if total turnover in the current calendar year does not exceed €100,000 (§ 19 (1) sentence 1 UStG). From the sale that takes you over the limit, that condition is no longer met. This applies to the whole sale, not only to the part above the limit. Example from the VAT Application Decree: €20,000 in the previous year, €80,000 so far in the current year, then an order of €40,000, paid at once. This sale is already subject to standard taxation in full (section 19.1 (2) UStAE).

What applies if I was over €25,000 last year?

If your total turnover in the previous calendar year was more than €25,000 but not more than €100,000, the switch to standard taxation generally takes place at the start of the current calendar year (Finanzamt Hessen). In the current year you are then subject to standard taxation from the very beginning.

The Finanzamt Hessen gives an example: a business owner founds the business in 2025 and achieves €18,000. In 2026 it is €60,000. At the start of 2027 the owner has to switch to standard taxation, because the previous year's turnover exceeded the €25,000 limit. The limit of the current year is then irrelevant.

So check in autumn where this year's turnover stands. If you were already in business in 2025 with no more than €25,000 and are above €25,000 but below €100,000 in 2026, you are still a small business owner in 2026; from 2027 standard taxation generally applies. If you only founded in 2026, the scheme already ends with the sale that takes you over €25,000.

What applies in the founding year?

If you founded in the current year, your sales are generally VAT-exempt up to €25,000. If this limit is exceeded in the founding year, the sale with which you exceed it is already subject to standard taxation in full, and so are all later sales. Sales whose payment you received before stay exempt (Finanzamt Hessen; section 19.7 (1) UStAE).

Situation	Consequence
Previous year over €25,000 (up to €100,000)	Standard taxation generally from the start of the current year.
Current year over €100,000	The scheme ends immediately; the sale with which you exceed the limit (in full) and all later sales are subject to standard taxation.
Founding year over €25,000	The sale with which you exceed the limit (in full) and all later sales are subject to standard taxation.
Sales paid before the limit was exceeded	Stay exempt.

What changes after you exceed the limit?

As long as your sale is VAT-exempt under § 19 (1) sentence 1 UStG, the filing duties of § 18 (1) to (4) UStG do not apply (§ 19 (1) sentence 2 UStG). When the exemption falls away, they apply again. In practice:

Advance returns: you submit them by the tenth day after the end of the advance return period (§ 18 (1) sentence 1 UStG). The advance return period is generally the calendar quarter; if the tax for the previous year was more than €9,000, it is the calendar month (§ 18 (2) UStG). How filing works in ELSTER: Submitting the advance VAT return online.
Input VAT: after the switch to standard taxation you can claim input VAT in the advance returns at the same time (Finanzamt Hessen). As a small business owner you were not entitled to deduct input VAT.
Invoices: an invoice must then contain the applicable tax rate and the tax amount on the consideration (§ 14 (4) no. 8 UStG). The reference to the exemption under § 19 UStG belongs on invoices for sales that are exempt under § 19 (1) UStG (§ 34a UStDV). On the mandatory details of those invoices: Writing an invoice as a small business owner in Germany.

Which mistakes happen often?

Watching only the €100,000. Anyone over €25,000 in the previous year is subject to standard taxation from the start of the year.
Carrying on without VAT. After the exemption falls away, standard taxation applies to the sale with which you exceed the limit and all later sales.
Showing VAT although the exemption applies. If you show a tax amount as a small business owner, you owe it (§ 14c (1) UStG; section 14c.1 (2) UStAE).
Mixing up net and gross. For the limits, the net sales received count.
Forgetting the advance returns. After the switch, deadlines arise. Put them in your calendar.

How VAT GPT helps

If you are subject to standard taxation and have to file advance returns, VAT GPT calculates them from your reports. In three steps:

Upload: You upload your Amazon or eBay CSV reports and your invoices. The AI reads amounts, countries and tax rates.
Check: VAT GPT breaks down the VAT for Germany and the EU (OSS) and prepares the advance return, monthly or quarterly. You check and confirm.
Send: With VAT GPT Pro, the advance return goes via ELSTER directly to the tax office.

Are you just starting out? In the tax registration questionnaire for sole proprietorships, you choose in VAT GPT whether you apply the small business scheme or waive it. Everything is in one place: advance VAT return, annual VAT return, OSS return, EÜR, trade tax and income tax returns. There is Free (basic features, free of charge), Go (30 days free with all Pro features) and Pro (€49 per month or €444 per year, each including VAT). Try for Free Now

Frequently asked questions

What happens if I exceed the small business limit? It depends on the limit: in the current year (€100,000, in the founding year €25,000) the scheme ends immediately; if the previous year's turnover was over €25,000, standard taxation generally applies from the start of the year.

Do I have to pay VAT retroactively? Not on sales whose payment you received before exceeding the limit. They stay exempt (Finanzamt Hessen). If you exceed the limit in the current year, however, an earlier sale whose payment arrives only afterwards is subject to standard taxation (section 19.7 (1) UStAE).

Does the €100,000 limit still apply if I was over €25,000 last year? It is then irrelevant: standard taxation applies from the start of the year (Finanzamt Hessen).

Can I become a small business owner again after exceeding the limit? If you fell out of the scheme by law, you can use it again as soon as the conditions of § 19 (1) UStG are met again: total turnover of no more than €25,000 in the previous year and no more than €100,000 in the current year. If you keep filing advance returns under standard taxation in that year, this generally counts as a waiver (Finanzamt Hessen). If you waived the scheme voluntarily, a binding period of at least five calendar years applies – see Switching to standard VAT.

Does VAT count towards total turnover? No. The net sales received count (Finanzamt Hessen).