Switching from the small business scheme to standard VAT in Germany

You reach standard taxation in two ways: automatically, if you exceed the turnover limits, or voluntarily, by waiving the small business scheme (Kleinunternehmerregelung). You declare the waiver to the tax office, irrevocably, by the last day of February of the second calendar year following the taxation period; it binds you for at least five calendar years (§ 19 (3) UStG).

Last updated: 27 October 2026

In short

Automatic: standard taxation applies above €25,000 (previous year), €100,000 (current year) or €25,000 (founding year).
Going back: revocation only takes effect from the start of a following calendar year.
After the switch: you declare the tax in advance returns and can claim input VAT.

When do I switch to standard taxation?

There are two triggers. First, the turnover limits: if you had more than €25,000 in the previous year, you generally switch at the start of the current year. If you exceed €100,000 in the current year (€25,000 in the founding year), the scheme ends immediately (Finanzamt Hessen). Second, your own waiver under § 19 (3) UStG. This article is mainly about the waiver.

How to declare the waiver

You can waive the small business scheme voluntarily and thereby switch to standard taxation, for example to claim input VAT (Finanzamt Hessen). How it works:

To whom: to the tax office.
By when: by the last day of February of the second calendar year following the taxation period (§ 19 (3) sentence 1 UStG). For 2025 that is 28 February 2027 (example of the Finanzamt Hessen). For 2026 it is 29 February 2028, because 2028 is a leap year.
Effect: the waiver takes effect from the beginning of the taxation period for which it is to apply (§ 19 (3) sentence 2 UStG). If it is declared in time for 2025, standard taxation applies from 1 January 2025 (Finanzamt Hessen).
Form: it can be declared informally to the tax office (Finanzamt Hessen).
Irrevocable: the declaration is irrevocable (§ 19 (3) sentence 1 UStG).

Be aware of the trap: because the waiver can be informal, the tax office generally also treats the filing of an advance VAT return or annual VAT return under standard taxation as a waiver (Finanzamt Hessen). More: VAT return for a small business.

Can I waive the scheme when founding the business?

When you found your business, you can declare the waiver in the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) (Finanzamt Hessen). The questionnaire has to be sent to the competent tax office within one month of founding. You can also declare the waiver independently of the questionnaire, retroactively, by the last day of February of the second following calendar year (Finanzamt Hessen). How the questionnaire works: Applying for a tax number.

Five years' binding period and revocation

The waiver binds you for at least five calendar years. You can revoke it with effect from the beginning of a subsequent calendar year (§ 19 (3) sentences 3 and 4 UStG). After the five years, standard taxation continues to apply until you revoke the waiver to the tax office; the revocation only takes effect in advance, from the beginning of a following calendar year (Finanzamt Hessen).

The Finanzamt Hessen gives an example: a business owner founds in 2025 and waives in the same year. In December 2030 the owner declares the revocation. Total turnover in 2030 was €20,000. From the start of 2031 the owner may apply the small business scheme again, because in the previous year the €25,000 limit was not exceeded and the five-year binding period from 2025 to 2029 inclusive has expired. In 2031 sales up to €100,000 are VAT-exempt.

What changes after the switch?

Advance returns: you declare the tax in the advance VAT returns (Finanzamt Hessen). They are due 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 (§ 18 (2) UStG). Details: Submitting the advance VAT return online.
Input VAT: you can claim input VAT at the same time (Finanzamt Hessen). As a small business owner you are not entitled to deduct it.
Invoices: they contain the tax rate and the tax amount on the consideration (§ 14 (4) no. 8 UStG). As a small business owner you must not show VAT separately (Finanzamt Hessen).

Whether the switch is favourable for you depends on your sales, your customers and your expenses. That is a question for tax advice, not for this article.

Which mistakes happen often?

Filing an advance return without wanting to waive. It generally counts as a waiver.
Overlooking the binding period. After the waiver you are bound for at least five calendar years; the waiver itself cannot be taken back.
Missing the deadline. It ends on the last day of February of the second following year.
Carrying on without tax. After the switch, the tax rate and the tax amount belong on your invoices (§ 14 (4) no. 8 UStG). Conversely, as a small business owner you owe any tax amount you show (§ 14c (1) UStG; section 14c.1 (2) UStAE).
Declaring the revocation too late. It only takes effect in advance, from the beginning of a following calendar year.

How VAT GPT helps

If you have switched and 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

Until when can I waive the small business scheme? By the last day of February of the second calendar year following the taxation period (§ 19 (3) UStG). For 2025: 28 February 2027.

How long am I bound after the waiver? At least five calendar years (§ 19 (3) UStG).

Can I take the waiver back? The declaration is irrevocable. You can, however, revoke the waiver with effect from the beginning of a subsequent calendar year – at the earliest after the binding period.

Does the waiver need a particular form? No, it can be informal (Finanzamt Hessen). An advance return under the rules of standard taxation generally also counts as a waiver.

Can I waive already when founding? Yes, for example in the tax registration questionnaire (Finanzamt Hessen).

May I deduct input VAT after the switch? Yes. You can claim input VAT in the advance returns (Finanzamt Hessen).