Small Business Revenue Limits 2025/2026
New thresholds €25,000 / €100,000 — Calculation, Exceeding & Practical Examples
Das Wichtigste in Kürze
- Previous year: Maximum €25,000 (net) — raised from €22,000 gross since 2025
- Current year: €100,000 hard cap — immediate effect when exceeded
- Calculation basis: Net instead of gross since 2025 — changed by Annual Tax Act 2024
- Founding year: Only actual revenue counts — no more annualization to 12 months
The New Revenue Limits from 2025
The Annual Tax Act 2024 (Jahressteuergesetz 2024) fundamentally reformed the revenue thresholds for small business owners (Kleinunternehmer). Since January 1, 2025, two thresholds apply under § 19 UStG:
Previous Year Revenue (net)
Your revenue in the previous calendar year must not exceed this amount. Important: Since 2025, this is calculated on a net basis (Nettobasis).
Hard Cap (current year)
In the current calendar year, your revenue must not exceed this limit. If exceeded, the exemption ends immediately (sofortige Wirkung).
Important: Both thresholds must be met simultaneously. Even if your previous year's revenue was below €25,000, you lose your small business status immediately if you exceed the €100,000 mark in the current year.
Old vs. New Rules Compared
| Criterion | Until 2024 | From 2025 |
|---|---|---|
| Previous year limit | €22,000 (gross) | €25,000 (net) |
| Current year limit | €50,000 (forecast) | €100,000 (hard cap) |
| Calculation basis | Gross amounts | Net amounts |
| Effect of exceeding | From following year | €100k: Immediate |
| Founding year | Annualized to 12 months | Actual revenue only |
| Forecast required? | Yes (estimate) | No (hard cap only) |
Calculating Revenue Correctly
Not all income counts toward the small business threshold. Here is how to correctly determine your relevant revenue (Umsatz):
Included in revenue:
- All deliveries of goods and services (Lieferungen und sonstige Leistungen, § 1 Abs. 1 Nr. 1 UStG)
- Deemed supplies for private use (unentgeltliche Wertabgaben / Eigenverbrauch)
- Intra-community acquisitions (innergemeinschaftliche Erwerbe), if applicable
Not included in revenue:
- VAT-exempt supplies without input tax deduction (e.g., medical/therapeutic services)
- Sale of business assets (Anlagevermögen, e.g., company vehicle)
- Ancillary transactions (Hilfsgeschäfte, e.g., reselling office supplies to a neighbor)
What Happens When You Exceed the Limit?
There are two scenarios for exceeding the revenue threshold — each with different consequences:
Scenario 1: Previous Year Limit (€25,000)
- Previous year revenue exceeded €25,000 net
- Effect: Regular taxation from the following year
- You have time to prepare for the transition
- All existing invoices remain valid
Scenario 2: €100,000 Cap (current year)
- Cumulative annual revenue exceeds €100,000
- Effect: Immediately from the triggering invoice
- The triggering invoice must include VAT
- No transition period whatsoever
Practical Examples
Lisa — Graphic Designer (part-time)
Previous year: €18,000 revenue. Current year so far: €22,000.
✅ Lisa keeps her small business status. Previous year below €25,000, current year below €100,000.
Max — Web Developer (freelancer)
Previous year: €24,500 revenue. In October, his cumulative revenue reaches €100,500.
❌ The invoice that pushes Max past €100,000 must already include VAT (Umsatzsteuer). Immediate effect — no grace period.
Anna — Yoga Teacher (founded in July)
Starts her business in July, earns €15,000 by December.
✅ Anna keeps her small business status. Only actual revenue counts (no annualization to €30,000 as under the old rules).
Revenue Monitoring Tips
With the new hard €100,000 cap, regular revenue monitoring is essential. Here are our recommendations:
Use invoicing software
Tools like Clever Invoice automatically track your cumulative revenue and alert you when approaching thresholds.
Monthly revenue tracking
Keep a simple spreadsheet with cumulative annual revenue. Start planning when you reach €80,000.
Plan a buffer zone
Approaching the €100,000 cap? Plan the transition early and calculate your prices with VAT included.
Consult a tax advisor (Steuerberater)
When revenue exceeds €60,000, professional advice on the optimal timing for switching to regular taxation is worthwhile.
Häufige Fragen
What are the small business revenue limits (Kleinunternehmergrenze) for 2025/2026?
From 2025, two thresholds apply under § 19 UStG: Your previous year's revenue must not exceed €25,000 (net). Additionally, there is a new hard cap of €100,000 in the current year. If you exceed this cap during the year, the small business exemption (Kleinunternehmerregelung) ends immediately. These thresholds remain unchanged for 2026.
Are the revenue limits calculated on a gross or net basis?
Since 2025, the revenue limits are calculated on a net basis (Nettobasis). Until 2024, gross amounts applied. Since small business owners (Kleinunternehmer) do not charge VAT, their net and gross amounts are identical. For comparison with previous years: €25,000 net equals approximately €29,750 gross (at 19% VAT).
What happens if you exceed the €100,000 threshold?
The €100,000 threshold is a hard cap (harte Obergrenze). The invoice that causes you to exceed this threshold is already subject to regular VAT. Example: Your cumulative annual revenue is €98,000 and you issue an invoice for €5,000. This invoice must already include VAT (Umsatzsteuer).
What counts as revenue for the small business threshold?
Revenue includes all taxable supplies under § 1 Abs. 1 Nr. 1 UStG — meaning deliveries of goods and services. It does not include: VAT-exempt supplies without input tax deduction (e.g., medical services), sales of business assets (Anlagevermögen), or ancillary transactions (Hilfsgeschäfte).
Does the revenue limit apply in the founding year (Gründungsjahr)?
Yes. In the founding year, only your actual revenue counts — there is no longer any annualization (Hochrechnung) to 12 months. For example, if you start your business in September and earn €20,000 by December, you remain a Kleinunternehmer. The €100,000 hard cap also applies in the founding year.
Do I need to continuously monitor my revenue?
Yes. Due to the new hard €100,000 cap, ongoing revenue monitoring is essential. We recommend keeping a simple spreadsheet or using invoicing software that automatically tracks your cumulative revenue. This helps you avoid unintentional threshold breaches.
Can I use the small business exemption again if my revenue drops?
Yes. If your previous year's revenue falls back below €25,000 net and you have not formally waived (Verzicht) the small business exemption, you can use it again the following year. If you did waive the exemption, you must wait 5 years before returning.
How does the revenue limit work with multiple businesses?
Each business is assessed individually, provided they are separate legal entities (different natural or legal persons). However, if one person operates multiple trades as a sole proprietor (Einzelunternehmer), all revenues are combined for the threshold calculation.
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