Skip navigation

Who is an entrepreneur?

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 includes, in particular, deliveries (e.g. sale of goods in a store, online trading) and other services (e.g. renting out real estate, services, repairs, IT consulting) that you provide in Germany in return for payment. It does not matter whether you make a profit or are obliged to register a business.

Legal entities (e.g. a GmbH or AG) and associations of persons (e.g. a GbR or OHG) can also be entrepreneurs.

The services you provide as part of your business are generally subject to VAT. If your turnover did not exceed € 22,000 in the previous year and is not expected to exceed € 50,000 in the current year, you can make use of the so-called small business regulation (Section 19 of the German Value Added Tax Act - UStG). In this case, no VAT will be charged on the services you provide. In return, however, you will not be able to deduct input tax from the services you purchase.

You are also carrying out an entrepreneurial activity if your sales are tax-free (e.g. tax-free rental, tax-free medical professional activity, tax-free activity as an insurance agent) or you apply the small business regulation. Under certain circumstances, VAT obligations may arise for you in these cases. This may be the case, for example, if you receive services from a company based abroad and the reverse charge procedure must be observed.

This page uses cookies. You can find out more information about the General Data Protection Regulation under Data protection.