Kleinunternehmer invoice: how to invoice without VAT

Who can use the Kleinunternehmerregelung

The Kleinunternehmerregelung (§ 19 UStG) is Germany's small business scheme, and a Kleinunternehmer is simply a small business owner who uses it. The reference in brackets points to section 19 of the Umsatzsteuergesetz (UStG), the German VAT Act, which is why the same reference appears in the sentence you print on your invoices. The scheme lets businesses with a modest turnover leave Umsatzsteuer, the German VAT, off their invoices completely, so they don't charge it to their clients and don't pay it over to the tax office. For a freelancer, a side business or a very small shop, adding VAT to every invoice and accounting for it would be a lot of work for very little tax, so the law lets them skip it as long as they stay small.

Whether you count as small depends on your turnover, which means your sales, not your profit after costs. In the tax office's terms, the limit is this: Net turnover up to €25,000 in the previous calendar year and not above €100,000 in the current year. The first part looks back at last year, so at the start of each year you already know whether the scheme is open to you. The second part looks at the year you are in: if this year's sales go above the higher figure, you no longer meet the condition, so keep a running total when a big year is coming.

An example shows how the two parts work together. Say last year you stayed under the first limit and this year your sales grow to €40,000. You stay in the scheme for the rest of this year, because only the higher limit applies to the current year. But next January you look back at a year above the first limit, so in that new year you have to add VAT to your invoices like any other business.

If you are just starting out, the rule works a little differently, because there is no previous year to look back on. In the year the business starts, only that year's actual turnover counts, and the limit is €25,000, not €100,000. The sale that takes the year's turnover over €25,000 is already taxed normally, and the exemption is also lost for the next year, because the previous year's turnover was then over €25,000. In practice that means a new business has to watch its first-year invoices closely, since a single large job can end the exemption part-way through the year.

The sentence your invoice needs

Because a Kleinunternehmer invoice has no VAT on it, it has to say why. Without that note your client could reasonably think you simply forgot to add VAT, and anyone checking your records later needs to see that the missing tax is deliberate. The usual German wording is this:

Gemäß § 19 UStG wird keine Umsatzsteuer berechnet (Steuerbefreiung für Kleinunternehmer).

In English, the same sentence reads:

No VAT is charged under § 19 UStG (small business exemption).

Most people put the sentence just below the total, so that it is read together with the amount it explains. The law doesn't insist on this exact wording, as the checklist in the next section shows, but the standard sentence is still the best choice, since clients and their accountants recognise it at a glance. Because it names the German rule, it belongs only on invoices under the German scheme; other countries' small-business schemes, such as the Dutch KOR and the French auto-entrepreneur scheme, have rules and wording of their own.

If you write your invoices in English, for example for a private client who doesn't read German, you may wonder whether the English sentence is legally enough or whether the tax office insists on German. German law is relaxed about this. An invoice may be in another language: the required notes may use the wording of any EU official language (for example 'Reverse charge' instead of 'Steuerschuldnerschaft des Leistungsempfängers'), and EU law bars a general translation requirement. German is the tax office's official language, so it can ask for a prompt translation of a foreign-language invoice (§ 87 AO). The example in that rule is about a different note, the one used when an EU business customer pays the VAT itself, but the same principle covers your exemption sentence, so the English version is fine on an English invoice. What the second half means in practice: if you invoice in English, be ready to hand the tax office (the Finanzamt) a German translation quickly if it asks for one; the AO in the reference is the German Fiscal Code.

Everything on this page is about clients in Germany, private or business. For a business client abroad, the VAT question for most services moves to the client's country, which this page doesn't cover, so check with a tax adviser before you send your first invoice to one.

What a Kleinunternehmer invoice shows and leaves out

An ordinary German invoice needs quite a long list of details, which you'll find on the Germany invoice requirements page. A Kleinunternehmer invoice, or Kleinunternehmer-Rechnung in German, needs fewer of them, because there is no VAT to calculate, break down by rate or check. This is the list to check your invoice against before you send it:

• Full name and full address of the supplier and of the customer
• Supplier's tax number (Steuernummer), VAT ID (USt-IdNr.) or small-business ID (Kleinunternehmer-Identifikationsnummer)
• Invoice date (date of issue)
• Quantity and usual trade name of the goods, or type and scope of the service
• The price as one sum, with a note that the small-business exemption applies (§ 19 UStG); plain wording such as 'steuerfreier Kleinunternehmer' is enough
• The word 'Gutschrift' if the customer (or someone on the customer's behalf) issues the invoice (self-billing)
• VAT law asks for nothing more, so an invoice number and the date of supply are not required
• No tax rate or VAT amount: VAT shown on a small-business invoice is owed (§ 14c Abs. 1 UStG), except on real supplies to private consumers
• Invoices up to €250 in total (Kleinbetragsrechnung) need only the supplier's name and address, the date, the goods or services and the amount, still with the note on the exemption (§ 33 UStDV)

Your Steuernummer is the tax number your local tax office (the Finanzamt) assigned to you, and it identifies you to that office. The VAT ID, or USt-IdNr., is a separate number such as DE123456788, which businesses use mainly when dealing with businesses in other EU countries. Either one is enough on a Kleinunternehmer invoice, as is the small-business ID mentioned in the list if you have been given one, so if you have no VAT ID you simply use your Steuernummer.

Showing the price as one sum means your invoice stops at the amount. A web designer billing a client for a new landing page might list "Design and build of landing page, 1 flat fee, €900.00" and "Copy editing, 3 hours at €50.00, €150.00", with a total of €1,050.00 and the exemption sentence beneath it. There is no VAT column, no zero rate and no separate gross total, because any of those could be read as tax you are charging. The client pays exactly the amount shown.

You'll also notice that VAT law doesn't require an invoice number or the date of the service. Both are still worth including, because a number lets you and your client refer to one particular invoice without confusion, and the date of the work saves questions about which job or month you are billing. The maker counts invoice numbers up for you; the guide to invoice numbers explains which formats work.

What happens if VAT appears on the invoice

The one mistake that really costs Kleinunternehmer money is showing VAT anyway. It usually happens by accident: an old template from a previous job still adds 19% to every line, or a business client asks for VAT to be shown and you go along with it. Whatever the reason, the law is strict. If an invoice shows more VAT than is due (a too-high rate, VAT on an exempt supply or a service taxed abroad, or any VAT on a Kleinunternehmer's invoice), the issuer owes the amount shown until the invoice is corrected, and a business customer can't deduct the excess (§ 14c Abs. 1 UStG; the tax office doesn't apply this to real supplies invoiced to private consumers). Anyone who shows VAT without being in business or without supplying anything owes it too, and can only correct it with the tax office's consent (§ 14c Abs. 2 UStG).

For you as a Kleinunternehmer this comes down to who your client is. If you did the work for a private customer and showed VAT by mistake, the tax office doesn't claim that VAT. If your client is a business, it does. The stricter rule, where only the tax office can allow a correction, is for people who aren't in business at all or who billed for work that never happened, so it doesn't apply to you.

Suppose you bill an agency €2,000.00 for a set of product photos and, out of habit, add 19% on top: the invoice now shows €380.00 of VAT and a total of €2,380.00. You owe that €380.00 to the tax office until you correct the invoice. The agency can't deduct it as input tax (the VAT that businesses normally get back on their purchases), so once it notices, it will ask you to refund the €380.00 and send a corrected invoice. It is no better when the VAT is shown inside a price you had already agreed: if your fee was €2,000.00 and the invoice splits it into €1,680.67 plus €319.33 VAT, you owe the €319.33 until you have corrected the invoice.

Even with the exception for private clients, the safe habit is the same whoever your client is: no tax rate, no VAT amount, and the exemption sentence on every invoice. If you discover VAT on an invoice you have already sent, ask a tax adviser how to correct it, because a correction only takes effect once certain conditions are met.

Making the invoice in the maker

When you open the invoice maker from this page, it is already set up for this case: business country Germany, euros and A4 paper, with VAT exemption switched on, so no VAT is added to any line and the exemption sentence is printed on the invoice.

1. Open the maker with the button on this page; Germany and VAT exemption are already set.
2. Enter your business details once: your name, full address and bank details (IBAN and BIC), plus your VAT ID if you have one. If you only have a Steuernummer, add it in a custom field or the notes so that it appears on the invoice.
3. Add your client with their full name and address.
4. Add a line for each job or product, with a description, the quantity, a unit such as hours or days, and the price. Mention the date of the work in the description.
5. Choose the invoice language, for example German for a client in Germany or English for a client who prefers it; the whole invoice and the PDF switch language.
6. Download the PDF or print it. With a free account you can also send it by email, or as a link where your client can view and download it.

The maker's PDF is an ordinary invoice for people to read, not an e-invoice. In German law an e-invoice carries the invoice as structured data that the client's accounting software reads without anyone typing it in: an XRechnung file, or a ZUGFeRD PDF with that data built into it. A plain PDF like the maker's, with no such data inside, doesn't count as one. The first question below explains why that is usually fine for you.