Tax Returns for Small Business Owners
Obligations, Forms, Deadlines & Tax-Saving Tips for 2025/2026
Das Wichtigste in Kürze
- Obligation: Income tax return with EÜR (Einnahmen-Überschuss-Rechnung) via ELSTER
- No longer required: VAT advance returns and annual VAT return (since 2024)
- Deadline: July 31 of the following year (without Steuerberater)
- Trade tax: Only if profit exceeds €24,500 — freelancers (Freiberufler) are exempt
Tax Obligations Overview
The good news: As a Kleinunternehmer, you have significantly fewer tax obligations than businesses under regular taxation (Regelbesteuerung). Here is the overview:
The EÜR (Einnahmen-Überschuss-Rechnung) Explained
The EÜR (Einnahmen-Überschuss-Rechnung), also known as the income-expenditure statement, is the simplified profit calculation method for Kleinunternehmer. The principle is straightforward:
The cash basis principle (Zufluss-/Abflussprinzip) applies: Income counts when it arrives in your bank account. Expenses count when they are paid. The invoice date is not decisive — the payment date is what matters.
Special rule for Kleinunternehmer: Since you cannot claim input VAT (Vorsteuerabzug), you always enter the gross amount for business expenses. The VAT on your purchases is a real cost for you.
Required Forms
Main form (Mantelbogen ESt 1 A)
Main income tax form with personal details
EveryoneEÜR Annex (Anlage EÜR)
Simplified profit calculation (income minus expenses)
EveryoneAnnex G (Anlage G) — Trade income
Income from trade or business operations
Trade businessesAnnex S (Anlage S) — Self-employment income
Income from freelance / self-employed activity
FreelancersAnnex Vorsorgeaufwand
Insurance contributions (health, pension, etc.)
EveryoneTrade tax return (Gewerbesteuererklärung)
Required for all trade businesses (exemption: €24,500)
Trade businessesDeadlines & Important Dates
| Tax year | Without tax advisor | With tax advisor (Steuerberater) |
|---|---|---|
| Tax year 2025 | July 31, 2026 | April 30, 2027 |
| Tax year 2026 | July 31, 2027 | February 28, 2028 |
Note: Filing must be done exclusively electronically via ELSTER (elster.de). Paper submissions are no longer permitted for self-employed individuals in Germany.
Deductible Business Expenses
As a Kleinunternehmer, you can deduct the following business expenses (Betriebsausgaben) from your taxable income:
Important: As a Kleinunternehmer, you always deduct the gross amount since you cannot claim input VAT (Vorsteuer). The VAT included in your purchases is a real business expense for you.
Bookkeeping as a Small Business Owner
Bookkeeping as a Kleinunternehmer is significantly simpler than under regular taxation (Regelbesteuerung). You do not need double-entry bookkeeping — a simple EÜR is sufficient.
Record income
Document all incoming payments with date, amount, and customer name.
Record expenses
Track all outgoing payments with receipt, date, and purpose.
Retain receipts
10-year retention obligation (Aufbewahrungspflicht). Digital storage is permitted under GoBD compliance.
Archive invoices
File outgoing and incoming invoices separately and chronologically.
Tax-Saving Tips for Small Business Owners
December purchases
Make larger purchases before year-end to reduce your profit for the tax year.
Home office allowance (Homeoffice-Pauschale)
Up to €1,260 per year (210 days x €6) for working from home.
Low-value assets (Geringwertige Wirtschaftsgüter / GWG)
Purchases up to €800 net can be fully deducted immediately in the year of purchase.
Mileage log or flat rate
Deduct €0.30/km for business trips (€0.38/km from the 21st kilometer onward).
Special depreciation under § 7g EStG
Up to 50% special depreciation on new business assets in the first year of acquisition.
Häufige Fragen
Which tax returns must a Kleinunternehmer (small business owner) file?
You must file an income tax return (Einkommensteuererklärung) with the EÜR annex (Anlage EÜR — simplified profit calculation) and either Annex G (Anlage G) for trade income or Annex S (Anlage S) for self-employment income. Since 2024, the annual VAT return (Umsatzsteuer-Jahreserklärung) is no longer required. A trade tax return (Gewerbesteuererklärung) is only needed if your profit exceeds €24,500.
Does a Kleinunternehmer need to file a VAT return (Umsatzsteuererklärung)?
No. Since the 2024 tax year, small business owners are exempt from filing the annual VAT return. The Growth Opportunities Act (Wachstumschancengesetz) eliminated this obligation. VAT advance returns (Umsatzsteuer-Voranmeldungen) are also not required.
What is the Anlage EÜR (income-expenditure statement)?
The Anlage EÜR (Einnahmen-Überschuss-Rechnung) is the simplified profit calculation method for small business owners and freelancers. You compare business income against business expenses — the difference is your profit. Double-entry bookkeeping or a balance sheet (Bilanz) is not required.
When is the deadline for the small business tax return?
Without a tax advisor (Steuerberater): July 31 of the following year (for 2025, that means July 31, 2026). With a tax advisor: April 30 of the year after that (for 2025, that means April 30, 2027). Filing must be done electronically via ELSTER.
Does a Kleinunternehmer need a tax advisor (Steuerberater)?
A tax advisor is not mandatory. The tax return for a Kleinunternehmer is relatively straightforward since there are no VAT-related complexities. If your profit is below €24,500 and your EÜR is simple, you can prepare the return yourself. For higher profits or complex situations, professional help is recommended.
Which business expenses can a Kleinunternehmer deduct?
You can deduct all business-related expenses: work equipment, office supplies, software, travel costs, telecommunications, professional development, insurance, home office, and more. Important: Keep receipts for 10 years. Since you cannot claim input VAT (Vorsteuer), you deduct the full gross amount as a business expense.
Does a Kleinunternehmer have to pay trade tax (Gewerbesteuer)?
Only if you are a trade business (Gewerbetreibender) — not a freelancer (Freiberufler) — and your trade income exceeds the €24,500 exemption (Freibetrag). Most Kleinunternehmer earn below this threshold, so no trade tax is due. However, the trade tax return must still be filed.
What is ELSTER and do I need it as a Kleinunternehmer?
ELSTER (Elektronische Steuererklärung) is the online tax filing portal of the German tax authorities. Since 2011, all self-employed individuals and trade businesses must file their tax returns electronically. As a Kleinunternehmer, you use ELSTER for your income tax return and Anlage EÜR.
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