Who is an entrepreneur?

The term "VAT company" is defined in Section 2 of the German Value Added Tax Act (UStG). You are an entrepreneur within the meaning of VAT law if you carry out a commercial or professional activity on a self-employed basis that is designed to generate income on a permanent basis. This is particularly the case if you carry out deliveries (e.g. sale of goods in a store, online trading) or other services (e.g. renting out real estate, providing services, carrying out repairs, IT consulting) in return for payment. It does not matter whether you achieve a minimum turnover, make a profit or are obliged to register a business.

You are also carrying out an entrepreneurial activity if the services you provide are exempt from VAT (examples: Tax-free letting of an apartment, exercising a tax-free medical profession or making use of the small business regulation of § 19 UStG). Under certain circumstances, VAT obligations may arise for you in these cases despite the tax exemption of the services provided. This may be the case, for example, if you receive services from a company based abroad and the transfer of tax liability (reverse charge procedure, Section 13b UStG) must be observed in this respect.