Starting in 2025, Germany will increase the revenue limits for small entrepreneurs (Kleinunternehmer). Learn about tax changes, new regulations, and how to maintain your VAT-exempt status.

In Germany, small entrepreneurs (Kleinunternehmer) can benefit from a simplified tax regime that exempts them from paying VAT if their annual turnover does not exceed a certain limit. Previously, this limit was set at €22,000 for the previous year and €50,000 for the current year.

However, at the end of 2024, a draft law was introduced that proposes an increase in these limits. Now, for those who choose small entrepreneur status, the annual turnover must not exceed €25,000 in the previous year and €100,000 in the current year. This innovation is related to inflation and aims to increase the attractiveness of the small entrepreneur status for small business owners.

With the adoption of these changes, entrepreneurs will be able to maintain simplified tax reporting while having a higher turnover. However, it is important to remember that if the established limits are exceeded, the entrepreneur will lose their Kleinunternehmer status and will be required to start paying VAT.

This change is particularly relevant for small businesses that want to grow without facing excessive bureaucratic hurdles while still staying within the set limits.

In any case, before deciding on the status of their business, it is recommended that entrepreneurs consult a tax law attorney to assess all potential risks and benefits.