Small Business Regulation in the EU
§ 19a UStG: Tax-free cross-border sales within the EU since 2025
Das Wichtigste in Kürze
- New from 2025: Section 19a UStG enables cross-border VAT exemption within the EU
- EU total limit: EUR 100,000 EU-wide total revenue -- hard upper limit
- Registration: Required at BZSt (Bundeszentralamt fuer Steuern / Federal Central Tax Office)
- Reporting: Quarterly reports on EU-wide revenue are mandatory
What is the EU Small Business Regulation?
The EU small business regulation under section 19a UStG is one of the most significant changes introduced by the Jahressteuergesetz 2024 (Annual Tax Act 2024). It implements EU Directive 2020/285 and harmonizes small business VAT exemptions across the European Union.
The Core Principle
German Kleinunternehmer can now sell to customers in other EU countries and benefit from the local VAT exemption for small businesses in those countries -- without having to register for tax purposes in each individual member state. Conversely, EU small businesses from France, Austria, etc. can use the German Kleinunternehmerregelung for their sales in Germany.
Legal basis: Section 19a UStG (new from 2025), based on EU Directive 2020/285 for the harmonization of small business VAT exemptions across EU member states.
Requirements for the EU Small Business Regulation
To use the EU small business regulation, four conditions must be met simultaneously:
National Kleinunternehmerregelung
You must already be using the German Kleinunternehmerregelung (section 19 UStG) -- prior-year revenue below EUR 25,000 net.
EU total revenue below EUR 100,000
Your combined revenue across all EU member states must not exceed EUR 100,000. This is a hard cap that triggers immediate loss of the exemption.
Respect national thresholds
In each EU country where you use the exemption, you must stay below that country's national revenue threshold for small businesses.
Registration with BZSt
You must register with the Bundeszentralamt fuer Steuern (Federal Central Tax Office) and receive an EU-KU identification number with the "EX" suffix.
Registration with the BZSt
Registration for the EU small business regulation is handled by the Bundeszentralamt fuer Steuern (BZSt / Federal Central Tax Office):
Submit your application
File an electronic application with the BZSt via their online portal.
Receive your EU-KU number
You will be assigned a special identification number with the suffix "EX" (e.g., DE123456789EX).
Set up quarterly reporting
Quarterly reports (Quartalsmeldungen) on your EU-wide revenue are mandatory. These break down revenue by member state.
Include the number on invoices
The EU-KU number must appear on all invoices issued to customers in other EU countries.
Note: The EU-KU identification number is separate from your regular USt-IdNr. (VAT ID). The "EX" suffix stands for "Exemption" and signals that you are participating in the EU small business scheme.
EU Country Limits Overview
Each EU country has its own national revenue threshold for the small business VAT exemption. Below are the thresholds for Germany and major EU markets:
| Country | National Threshold | Notes |
|---|---|---|
| Germany | EUR 25,000 | Prior-year revenue (net) |
| Austria | EUR 42,000 | Prior-year net revenue |
| France | EUR 25,000--37,500 | Varies by sector (trade vs. services) |
| Netherlands | EUR 20,000 | Net revenue |
| Belgium | EUR 25,000 | Net revenue |
| Italy | EUR 85,000 | Regime forfetario (flat-rate scheme) |
| Spain | EUR 85,000 | Net revenue |
| Poland | PLN 200,000 (~EUR 47,000) | Net revenue |
Important: In addition to each country's national threshold, you must stay below the EU-wide total limit of EUR 100,000. Even if a country has a higher national threshold, the EU total limit still applies.
Ongoing Obligations
Participating in the EU small business regulation comes with several ongoing requirements that you must fulfill:
Practical tip: Use invoicing software that tracks revenue by country automatically. This makes quarterly reporting much easier and helps you monitor your EUR 100,000 EU-wide limit in real time.
Practical Examples
These examples illustrate how the EU small business regulation works in practice for different business scenarios:
Anna -- Web Designer, also serves Austrian clients
Germany: EUR 18,000 revenue. Austria: EUR 5,000. Total: EUR 23,000.
Anna can use the EU small business regulation. Both national thresholds (DE: EUR 25,000, AT: EUR 42,000) and the EU total limit (EUR 100,000) are respected.
Thomas -- Consultant with clients in 5 EU countries
DE: EUR 20,000, AT: EUR 15,000, FR: EUR 10,000, NL: EUR 8,000, BE: EUR 5,000. Total: EUR 58,000.
Thomas meets all national thresholds and the EU total limit. However, his quarterly reports must break down revenue by each country individually.
Eva -- Online Shop with high Dutch revenue
DE: EUR 15,000, NL: EUR 22,000. Total: EUR 37,000.
Eva exceeds the Dutch national threshold (EUR 20,000). She must charge standard VAT in the Netherlands, but can continue using the Kleinunternehmerregelung in Germany.
Who Benefits from the EU Small Business Regulation?
The EU small business regulation is not for everyone. Here is a quick overview of who should consider it and who can likely skip it:
Well suited for:
- Freelancers with EU-based clients
- Small e-commerce sellers shipping within the EU
- Digital service providers (SaaS, consulting, design)
- Artists and creatives with EU commissions
- Coaches and trainers offering online courses across the EU
Less useful for:
- Purely local service providers with no EU clients
- Businesses without any cross-border sales
- B2B operators with high EU revenue (>EUR 100,000)
- Those who want to avoid the administrative overhead of quarterly reporting
- Businesses already registered for OSS (One-Stop-Shop)
Bottom line: The EU small business regulation is most valuable for small operators with occasional cross-border EU sales who want to avoid registering for VAT in each member state individually. If your EU sales are significant, the One-Stop-Shop (OSS) procedure may be more appropriate.
Häufige Fragen
What is the EU small business regulation under section 19a UStG?
The EU small business regulation (section 19a UStG) is a new provision effective since January 1, 2025. It allows German Kleinunternehmer to also benefit from VAT exemptions for small businesses in other EU member states -- and vice versa, EU small businesses from other countries can use the German Kleinunternehmerregelung.
What are the requirements for the EU small business regulation?
You must meet four conditions: 1) You must already use the national German Kleinunternehmerregelung (section 19 UStG), 2) Your total EU-wide revenue must stay below EUR 100,000, 3) You must respect each EU country's national revenue threshold, 4) You must register with the BZSt (Federal Central Tax Office) and submit quarterly reports.
How do I register for the EU small business regulation?
Registration is done through the BZSt (Bundeszentralamt fuer Steuern / Federal Central Tax Office). You will receive a special EU small business identification number with the suffix "EX". This number must appear on all invoices to customers in other EU countries.
Do I need to submit quarterly reports?
Yes, as a participant in the EU small business regulation, you must submit quarterly reports (Quartalsmeldungen) about your EU-wide revenue to the BZSt. This is used to monitor compliance with the EUR 100,000 EU total revenue limit.
What happens if I exceed the EU revenue threshold?
If you exceed EUR 100,000 in total EU-wide revenue, the EU small business regulation ends immediately. Starting from the invoice that causes you to exceed the threshold, you must charge the standard VAT rate in the respective EU countries.
Can a French small business use the German Kleinunternehmerregelung?
Yes, since 2025, EU small businesses from other member states can also use the German Kleinunternehmerregelung, provided they respect the German thresholds (EUR 25,000 prior-year revenue) and the EU-wide total limit (EUR 100,000).
Do I need a VAT ID (USt-IdNr.) for the EU small business regulation?
For the EU small business regulation, you receive a special EU-KU identification number (with the suffix "EX"), which is different from the standard VAT ID (USt-IdNr.). This number is issued by the BZSt and must appear on invoices to other EU countries.
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