Small business or standard VAT taxation

Since the reform, the small business rule typically uses 25,000 EUR total revenue in the previous calendar year and 100,000 EUR in the current calendar year. Older help texts and forums often still mention lower thresholds. That is outdated. Use the statute text on gesetze-im-internet.de.

If you exceed the current-year limit, the rule may cease. You show VAT on invoices, file pre-returns, and deduct input VAT from receipts. Plan the switch with your tax advisor before customers are surprised.

Pros: simpler invoices under § 34a UStDV, no VAT line, often less pre-return work. Cons: no input VAT on investments and incoming invoices, prices often look expensive to B2B customers who cannot deduct VAT.

If you mainly sell to private customers, the rule is more common. If you supply businesses or buy expensive equipment, standard taxation is often calculated. This is a framework, not a recommendation.

Under standard taxation you show 19 or 7 percent VAT and remit it to the tax office. You deduct input VAT from qualified incoming invoices. New founders often must file monthly. Whether quarterly is still allowed depends on current law. Check before planning deadlines.

Jupiter ERP stores taxation type centrally. Small business shows 0 percent and the mandatory note. Standard taxation calculates net, tax, and gross on the PDF. After 14 days trial without credit card, Free allows five invoices per month. Quotes start on Basic.

Imagine a laptop purchase at 1,000 EUR net and 190 EUR VAT. As small business you pay 1,190 EUR gross with no input VAT refund. As standard taxpayer you deduct 190 EUR input VAT if the receipt qualifies. Net effect depends on further revenue and tax rates.

For B2B customers with input VAT deduction, your net price without shown VAT looks more expensive because they cannot claim input VAT. For private customers the final price often matters. Model both scenarios before you publish prices.

Crossing the limit mid-year needs adjusted invoices and pre-returns. Do not plan the switch on 31 December without advice.

In the first steps you choose small business or standard taxation. Change the setting only after aligning with your advisor. Existing drafts may carry wrong tax rates.

E-invoicing and small business: reception duties apply regardless of § 19. Details are in the article on e-invoicing for founders. Jupiter ERP embeds ZUGFeRD in the PDF when the feature is active.