E-invoicing for small businesses in Germany (Kleinunternehmer): duties, exemptions, thresholds 2026

The two sides of the obligation, kept apart

Issuing: permanently exempt. You may keep sending your invoices on paper or, with the recipient's informal consent, as a plain PDF, to business customers too and also after 2028 (§ 34a sentence 4 UStDV, section 14.7a(3) UStAE, both German). The invoice must still state that the small business exemption applies to the supply (§ 34a sentence 1 no. 5 UStDV, German), for example: "Steuerfrei nach § 19 UStG (Kleinunternehmerregelung)" (VAT-exempt under the small business scheme). Everyday wording is fine as long as it clearly identifies the exemption (section 14.7a(1) UStAE, German).

Receiving: mandatory since 2025. If a supplier sends you a ZUGFeRD invoice or an XRechnung, you must be able to accept it, and that explicitly includes small businesses (section 14.1(5) UStAE, German). An email inbox is enough as a receiving channel. You must keep the invoice for eight years (§ 14b(1) UStG, German), and for an e-invoice at least the structured part in the format you received (GoBD margin no. 131, version of July 14, 2025, German). GoBD is the Finance Ministry's rulebook for electronic bookkeeping and record retention.

The new thresholds since 2025: €25,000 and €100,000

You count as a small business if your total turnover in the previous year was no more than €25,000 and does not exceed €100,000 in the current year (§ 19(1) UStG, German). Until the end of 2024 the thresholds were €22,000 and €50,000. Two of the changes have real consequences.

First, the €100,000 threshold is measured against actual turnover, no longer against a forecast. Second, exceeding it takes effect immediately: the very sale that takes you over the threshold is no longer tax-exempt, even in the middle of the year (section 19.1(2) UStAE, German). All sales before it stay tax-exempt, and all sales after it fall under standard VAT (Regelbesteuerung), including VAT pre-returns and the required invoice details under § 14(4) UStG (German).

The moment that catches many off guard: the switch

For growing online shops, this switch during the year is the critical point. From one order to the next you need VAT on your invoices, the correct VAT rates for each country and, once the B2B deadlines of 2027/2028 apply, structured e-invoices. If you only start looking for an invoicing system at that point, you will issue incorrect documents for weeks.

That is why it pays to set up the process early. Rechnungskit for small businesses covers both phases: the small business note today, and a smooth switch to standard VAT as soon as you exceed the threshold.

Reverse charge still matters for small businesses

The § 19 UStG exemption only applies to sales in Germany. It does not mean that every cross-border service is free of further VAT consequences. If a small business provides a service to a business in another EU member state, the place of supply is usually there (§ 3a(2) UStG, German), and the customer owes the tax. The invoice must then carry the note "Steuerschuldnerschaft des Leistungsempfängers" (reverse charge, the recipient is liable for the tax) (§ 14a(1) sentence 1 UStG, German), but a small business does not have to state the VAT IDs, because § 19(1) sentence 2 UStG (German) exempts it from the duty in § 14a(1) sentence 3 UStG. A small business does not file an EC Sales List (Zusammenfassende Meldung) (§ 18a(4) UStG, German).

On the purchasing side, a small business can itself become liable for the tax under § 13b UStG (German) when it buys a service that is taxable in Germany from a business not established in Germany. This applies to small businesses too (§ 13b(5) UStG, section 19.1(1) UStAE, both German). The tax arises by law, and a missing reverse charge note on the supplier's invoice does not change that.