Kleinunternehmer Invoicing: When to Switch to Regular VAT (Regelbesteuerung)

You started as a Kleinunternehmer, wrote your first invoices, and business is picking up. But at some point, the question arises: should you switch to regular taxation (Regelbesteuerung)? Maybe you’re approaching the revenue threshold, maybe your business clients expect a VAT ID on your invoices, or you’re frustrated by the inability to reclaim VAT on expensive purchases.

This guide explains exactly when the switch becomes mandatory, when it makes sense voluntarily, and how to manage the transition step by step — including concrete examples of how your invoices will change.

When the Switch to Regelbesteuerung Becomes Mandatory

The Kleinunternehmerregelung under §19 UStG is tied to clear revenue thresholds. Once you exceed them, you must switch to regular taxation — there’s no choice.

The Revenue Thresholds

EUR 25,000 in the previous year: If your total revenue exceeded this threshold in the prior calendar year, you lose Kleinunternehmer status on 1 January of the following year.
EUR 100,000 in the current year: If your revenue actually exceeds this threshold during the year, the Kleinunternehmerregelung ends immediately — not at year end.

Important: This refers to total revenue, not profit. All income from self-employed activities is combined — even if you have multiple freelance occupations.

New thresholds since 1 January 2025: Until the end of 2024 the limits were EUR 22,000 (previous year, gross) and EUR 50,000 (forecast for the current year). The Jahressteuergesetz 2024 replaced them with EUR 25,000 and EUR 100,000, and the amounts are now net. A lot of guidance still online quotes the old figures.

What Happens When You Exceed the Threshold?

This is where the law changed fundamentally. Previously your Kleinunternehmer status ran to the end of the year and VAT liability started in January. That is no longer the case.

If you cross the EUR 100,000 mark during the year, the Kleinunternehmerregelung ends at that moment. The very transaction that takes you over the threshold is already taxable — it is split proportionally, rather than the next one being the first to carry VAT. In practice:

The invoice that takes you over the line already shows VAT
So does every invoice after it
You notify the Finanzamt without delay
You start submitting VAT pre-notifications (USt-VA) from that point
You file an annual VAT return for the year

The EUR 25,000 previous-year threshold still works the old way: VAT liability begins on 1 January of the following year, so you do get lead time there.

The practical difference matters. If you breach EUR 100,000 and only notice when you do the books the following month, you have already issued invoices without VAT that should have carried it — and you owe the tax regardless. So it is worth watching your running revenue once it starts approaching the threshold.

When a Voluntary Switch Makes Sense

Even if you’re still below the thresholds, a voluntary switch to Regelbesteuerung can be the better choice. Here are the key signals:

You Work Primarily with Business Clients (B2B)

Business clients can deduct the VAT on your invoices as input tax (Vorsteuer) — the gross price is irrelevant to them. At the same time, the absence of a VAT ID on your invoice can raise questions with some companies. Switching to regular taxation signals professionalism and simplifies collaboration.

You Have High Business Expenses

As a Kleinunternehmer, you pay full VAT on every purchase without being able to reclaim it. If you regularly buy software licenses, hardware, office equipment, or external services, the input tax deduction can easily amount to several hundred or even thousand euros per year.

Your Business Is Clearly Growing

If you can see that you’ll reach either threshold soon, a proactive switch is better than a forced one. You can plan the transition calmly instead of reacting under time pressure.

You Want to Work Internationally

For business within the EU, you need a VAT identification number (USt-IdNr.). You can only get this as a regularly taxed business. If you want to serve clients in other EU countries, there’s no way around Regelbesteuerung.

Creating Invoices: Kleinunternehmer vs. Regelbesteuerung

The switch to regular taxation fundamentally changes your invoices. Here’s what changes concretely:

Invoice as Kleinunternehmer

As a Kleinunternehmer, your invoice includes the mandatory §19 UStG reference and shows no VAT:

Service description: Web design project
Net amount: EUR 2,000.00
VAT: not shown
Invoice total: EUR 2,000.00
Note: “No VAT charged pursuant to §19 UStG.”

Invoice with Regelbesteuerung

After switching, you must show VAT separately and include additional mandatory information:

Service description: Web design project
Net amount: EUR 2,000.00
VAT (19%): EUR 380.00
Invoice total: EUR 2,380.00
Your USt-IdNr. or tax number

What Changes on Your Invoices

Element	Kleinunternehmer	Regelbesteuerung
VAT shown on invoice	No	Yes (19% or 7%)
§19 UStG reference	Required	Removed
VAT ID (USt-IdNr.)	Not required	Recommended
Tax number	Required	Required
Input tax deduction	No	Yes

Practical tip: Review all active quotes and contracts. If you’ve agreed on fixed prices without a VAT clause, you need to clarify whether the 19% VAT is charged on top or included in the agreed price.

Step by Step: How to Switch to Regelbesteuerung

Step 1: Inform the Tax Office

Notify your Finanzamt informally that you’re waiving the Kleinunternehmerregelung as of a specific date. A brief letter or a message via ELSTER is sufficient. For a mandatory switch due to exceeding revenue thresholds, the notification happens automatically through your tax return.

Step 2: Apply for a VAT Identification Number

Apply for a USt-IdNr. at the Federal Central Tax Office (BZSt). You need this for intra-EU transactions, and it looks more professional on invoices than your regular tax number. The application is free and typically takes 1–2 weeks.

Step 3: Update Your Invoice Templates

Update all invoice templates:

Remove the §19 UStG reference
Add a line for VAT (19% or 7% depending on the service)
Include your USt-IdNr.
Adjust the total calculation (net + VAT = gross)

Step 4: Set Up VAT Pre-Notifications

In the first year after switching, you must submit the USt-VA monthly via ELSTER. From the second year, the tax office may allow quarterly submissions if your annual VAT liability is below EUR 7,500.

Deadlines: The USt-VA is due by the 10th of the following month. Apply for a permanent deadline extension (Dauerfristverlängerung) to get one additional month.

Step 5: Adjust Your Bookkeeping

With Regelbesteuerung, you need to:

Track incoming and outgoing VAT separately
Document input tax from incoming invoices
Create DATEV-compliant entries for your tax advisor

Step 6: Inform Your Clients

Notify your existing clients about the change, especially private clients. For them, your services will now be 19% more expensive (unless you lower your net prices). Business clients are typically unaffected since they deduct VAT as input tax.

Calculation Example: Is the Switch Worth It?

Let’s look at a concrete example of when a voluntary switch makes financial sense.

Scenario: Freelance Developer

Annual revenue: EUR 18,000
Annual business expenses (gross): EUR 5,950 (of which EUR 950 is VAT)
Client structure: 80% business clients, 20% private clients

As Kleinunternehmer:

Income: EUR 18,000
Expenses: EUR 5,950 (full VAT paid)
Effective result: EUR 12,050

With Regelbesteuerung:

Income: EUR 18,000 net (+ EUR 3,420 VAT, which you remit to the tax office)
Expenses: EUR 5,000 net (EUR 950 input tax is refunded)
VAT liability: EUR 3,420 - EUR 950 = EUR 2,470 (to the tax office)
Effective result: EUR 13,000

Advantage from Regelbesteuerung: EUR 950 per year — that’s the refunded input tax. The higher your business expenses, the greater the advantage. For business clients, nothing changes in terms of effective price since they deduct VAT anyway.

For private clients, you need to weigh: either increase the price by 19% (which may deter clients) or lower your net price and earn less per project.

Common Mistakes When Switching

1. Not Adjusting Existing Contracts

If you have fixed-price contracts without a VAT clause, the switch can get expensive. Clarify before switching whether you can add VAT to existing contracts or whether you’ll have to absorb it from your margin.

2. Missing the First USt-VA

The first VAT pre-notification must be submitted by the 10th of the month following your first month under Regelbesteuerung. Many people miss this deadline and risk late-filing surcharges. Set a reminder or use software with automatic deadline alerts.

3. Not Using Input Tax Deductions

From the day of the switch, you can claim input tax. Collect all incoming invoices carefully and verify they meet the formal requirements for input tax deduction (correct invoice address, shown VAT, etc.).

4. Continuing to Use Old Invoice Templates

Invoices without VAT are no longer valid after the switch. Make sure you use new templates exclusively from the effective date. Invoices issued before the switch remain valid, of course.

5. Underestimating the Lock-In

If you voluntarily switch to Regelbesteuerung, you’re bound to it for at least five calendar years. A quick switch back isn’t possible. Consider carefully whether the change makes long-term sense.

Checklist for a Smooth Transition

3 months before: Review revenue, make the decision, consult a tax advisor
2 months before: Apply for USt-IdNr. at BZSt
1 month before: Update invoice templates, configure accounting software, inform existing clients
On the effective date: Issue first invoice with VAT, start documenting input tax
10th of the following month: Submit first USt-VA via ELSTER
Ongoing: Submit monthly USt-VA on time, claim input tax
At year-end: Prepare annual VAT return

How Solobooks Makes the Switch Easier

Switching to Regelbesteuerung means more paperwork — but with the right software, the effort stays manageable. Solobooks supports you with:

Automatic VAT calculation: Select the applicable tax rate (19% or 7%), and Solobooks calculates net, VAT, and gross automatically on every invoice.
Legally compliant invoices: All mandatory fields are included automatically — whether as a Kleinunternehmer with the §19 reference or with full VAT details.
USt-VA export: Generate your VAT pre-notification directly from Solobooks and transfer the values to ELSTER.
DATEV export: Export your bookings in DATEV format for your tax advisor.
Revenue monitoring: Keep track of your annual revenue and get warned in time when you’re approaching the Kleinunternehmer thresholds.

Try free for 14 days and make the switch stress-free. You can read more on our bookkeeping with Solobooks page.

Frequently Asked Questions

Can I voluntarily switch from Kleinunternehmer to Regelbesteuerung? Yes, at any time. You then waive the application of §19 UStG. However, note that you’ll be bound to Regelbesteuerung for at least five years afterward.

From when do I need to show VAT on my invoices? From the moment Regelbesteuerung applies to you — your chosen date (voluntary switch), 1 January of the year after you breach the EUR 25,000 previous-year threshold, or immediately from the transaction that takes you over EUR 100,000.

Do I need to correct my old invoices? No. Invoices you correctly issued during the Kleinunternehmerregelung remain valid. Only new invoices after the switch must show VAT.

What happens with ongoing projects at the time of the switch? The decisive factor is the date of service delivery, not the invoice date. Services delivered before the switch can still be invoiced without VAT. Services after the switch must include VAT.

How does the switch affect my prices? For B2B clients, effectively nothing changes since they deduct VAT as input tax. For private clients, your services become 19% more expensive if you maintain your net price. Many freelancers use the switch as an opportunity to review and adjust their pricing generally.

Do I need a tax advisor for the switch? Not necessarily. With good accounting software, you can manage the switch yourself. However, a tax advisor can be helpful for the initial setup and special cases (e.g., existing contracts, partial services).

Sources

Last checked: 17 September 2026. This article is general information, not tax advice for your individual case. Legislation and official guidance change — the current version of each source prevails.

Last updated: March 22, 2026