Germany VAT Threshold 2026: €22,000 Rule Explained
The German VAT threshold is €22,000. Learn how it works, what counts toward it, and what happens when you exceed it.
The €22,000 / €50,000 Rule
To qualify for the Kleinunternehmerregelung: • Previous calendar year revenue must be ≤ €22,000 • Current year expected revenue must be ≤ €50,000
Both conditions must be met simultaneously. Revenue means gross turnover including any tax-exempt supplies.
What Counts Toward the Threshold
Included: • All taxable supplies • Tax-exempt supplies with input VAT deduction (e.g., exports)
Excluded: • Sales of capital assets • Tax-exempt supplies without input VAT deduction (e.g., medical services)
For the first year of business, the €22,000 threshold is prorated. If you start in July, the limit is approximately €11,000 for those 6 months.
Exceeding the Threshold
If you exceed the threshold: • You lose Kleinunternehmer status from January 1st of the following year • You must start charging 19% (or 7%) VAT • You must file regular VAT returns • You CAN now deduct input VAT
Plan ahead: if you're approaching the threshold in November, consider deferring some income to January.
Related Articles
Check your compliance
Get a personalized Tax Health Score with actionable recommendations.
Get Tax Health Score