Technical article
Small business regulation: Important information with WSB at a glance! 💡
No stress with VAT. For companies whose Turnover in the current calendar year does not exceed EUR 50,000.00 and EUR 22,000.00 in the previous yearthe tax office collects no sales tax. The "small business regulation" applies and VAT does not have to be shown on invoices.
If he mainly has private customers who cannot claim an input tax deduction, a small business owner can therefore offer his services on the market more cheaply than competitors who have to add VAT.
As small businesses are denied the right to deduct input tax, it may be worthwhile for them to waive the application of the small business regulation vis-à-vis the tax office. This can be done in an informal letter or by submitting advance VAT returns and declarations.
But beware: these "Option for standard taxation" is binding for at least five calendar years.
With the Annual Tax Act 2024 the taxation limits for small businesses are to be reduced to 25,000.00 Euro (sales in the previous year) and 100,000.00 euros (turnover in the current year).
But be careful here too: If the lower limit of EUR 25,000.00 is exceeded in the current year, the small business regulation can no longer be claimed in the following year. If the upper limit of 100,000.00 euros is also exceeded in the current year, the benefit is lost immediately!
New from 2025 should also be that small entrepreneurs
- enjoy a genuine sales tax exemption,
- may issue invoices with streamlined information,
- can be based in any EU country,
- may also claim the tax exemption in another EU country and
- do not have to issue electronic invoices.
Does the last point seem wrong to you? Us too!
The courts are currently contradicting each other on the question of whether small businesses have to issue e-invoices.
However, we will keep an eye on them and inform you as soon as the issue has been clarified.
👉 Are you looking for a reliable tax expert? We will be happy to assist you and help you with your questions and concerns: www.wsb-berater.com/leistungen
#Tax tips #Small business regulation #Annual Tax Act 2024 #WSB