Small business threshold exceeded: website prices from 2027

The previous-year threshold of 25,000 euros (UStG) decides the whole of the following year. If you are above it in 2026, you leave the scheme for 2027, even if the new year starts more quietly. The current-year threshold of 100,000 euros (UStG), by contrast, takes effect without delay: the statute ties the exemption to total turnover of that year not exceeding the threshold. If you exceed it during the year, for instance through one large contract, you do not wait for the turn of the year. Exactly from which sale tax is due and what the invoice for that contract looks like should be settled with your tax adviser beforehand, not afterwards.

What counts is not what was invoiced but what comes in. Section 19(2) UStG defines total turnover as the sum of taxable sales calculated on the basis of payments received (UStG). An invoice for a December job that is paid in January therefore counts towards the new year. Certain tax-exempt sales are deducted, and sales of fixed assets are disregarded (UStG): selling the old company car does not push the business over the threshold. For the autumn projection this means the incoming payments on the account are what matter, not the list of invoices written.

A rule of thumb for the autumn: if you are already close to the previous-year threshold at the end of October and still expect payments in November and December, plan for the switch. If the decision only becomes clear between Christmas and New Year, that is no problem as long as the new versions are prepared. Trouble starts only when the price page still carries the old note in February while the invoices have long been showing VAT.

The switch does not change the basic obligation, but it changes its content. Under Section 3(1) of the Price Indication Ordinance (PAngV), anyone who as a trader offers goods or services to consumers or advertises to them stating prices must state the total prices (PAngV). Under Section 2 no. 3, the total price is the price payable including VAT and other price components (PAngV). As a small business, that price contained no VAT; after the switch, it does. A net price with an asterisk on a page aimed at consumers is then no longer enough. The basic rules on showing prices apply regardless of the switch; this section only covers what changes with VAT.

For distance selling, meaning an online shop, voucher sales or binding bookings through the website, Section 6(1) PAngV adds a further requirement: you must also state that the prices include VAT and other price components, and whether freight, delivery or shipping costs apply (PAngV). This is the legal basis of the familiar line “incl. VAT”. Older guidance sheets still list this duty under Section 1(2); in the version of the Ordinance in force today it is in Section 6. Anyone who copies wording from old templates should therefore also check the sections cited in them. How price information works for pre-orders through the website, for example holiday goods from bakeries and butchers, is covered in the article on holiday orders on the website.

If an offer is aimed exclusively at business customers, Section 3 does not apply: the Ordinance addresses consumers, and under Section 2 no. 9 a consumer is any natural person within the meaning of Section 13 of the Civil Code (PAngV). Net prices with the addition “plus VAT” are common there. Mixed pages are the tricky case. If a price is broken down, the total price must be emphasised (PAngV); the gross amount is shown large, the net amount smaller next to it, not the other way round. For the line under the price, a few clear wordings are enough:

The invoice is where the switch is most visible in legal terms. A small business invoice under Section 34a UStDV states the consideration as one sum with a note that the small business exemption applies (UStDV). After the switch, the mandatory details of Section 14(4) UStG apply in full: among them the tax number or VAT identification number, a sequential invoice number, the time of supply, the consideration broken down by tax rate, and the applicable tax rate with the tax amount on the consideration (UStG). For invoices up to 250 euros (UStDV), Section 33 UStDV allows simplified details; consideration and tax amount may appear as one sum there, but the tax rate must be stated.

For business customers, the e-invoice comes on top. For supplies to other businesses, Section 14(2) UStG generally requires an electronic invoice in a structured format if both sides are established in Germany. Under Section 34a UStDV, small businesses may instead send their invoices as other invoices (UStDV), meaning on paper or in another electronic format. After the switch a transitional rule applies: for sales in 2027, the invoice may still be sent on paper until 31 December 2027 or, with the recipient’s consent, in another electronic format, provided total turnover in the previous year did not exceed 800,000 euros (UStG). By sales from 2028 at the latest, your invoicing software should therefore be able to produce structured electronic invoices.

The legal notice usually changes little. Section 5(1) no. 6 DDG requires the VAT identification number if you have one (DDG); if you receive one with the switch, add it there. What else the legal notice needs is covered in the article on legal notice requirements. Outside the website, advance returns are added: an advance VAT return must be submitted by the tenth day after the end of each return period (UStG). The standard period is the calendar quarter; if the previous year’s tax exceeded 9,000 euros (UStG), it is the calendar month. A special rule applies to new businesses: when an activity is taken up, the calendar month is the return period in that calendar year and the following one (UStG). If you only started in 2026, raise this explicitly; which period applies to you is something your tax adviser will clarify.

If total turnover in 2026 is at or below 25,000 euros, nothing changes for 2027 as long as 2027 does not exceed the threshold of 100,000 euros (UStG). The question then comes up again at the next turn of the year. For businesses just below the threshold it pays to keep the prepared list: the places change little from year to year, and the switch goes faster the following year.

Anyone who wants to switch deliberately can waive the scheme. Under Section 19(3) UStG, the declaration to the tax office can be made until the last day of February of the second calendar year following the tax period and is irrevocable (UStG); the waiver is binding for at least five calendar years (UStG). After that it can be revoked with effect from the start of a calendar year. Whether that pays off depends on your customers and your investments: if you work almost only for businesses or plan larger purchases, you reach a different result than a business with private customers. That weighing belongs with your tax adviser, not on the website.