E-invoicing for small businesses: receive yes, issue optional
Enter last year’s and this year’s turnover: the calculator shows whether the small-business scheme applies and which e-invoicing duties remain.
Small-business scheme
Available
Last year up to €25,000 and this year up to €100,000: you need not issue e-invoices (section 34a sentence 4 UStDV).
| Receive e-invoices | Required since 1 January 2025 |
| Issue e-invoices | voluntary |
| Note on the invoice | Exemption under section 19 UStG |
| Inbox for receiving | An email inbox is enough |
Basis: section 19(1) UStG as in force from 2025, section 34a UStDV, Finance Ministry FAQ.
Prepared by Radif Partners · Method · VAT Act, ministry letters and XRechnung 3.0.2 checked on 25 October 2026
For small businesses under the German scheme (Kleinunternehmer), the e-invoicing mandate splits in two. Like everyone else, they have had to receive every e-invoice a domestic supplier sends since 1 January 2025; an email inbox and a program or viewer that makes the XML readable are enough. They never have to issue one: under section 34a sentence 4 of the VAT implementing regulation (UStDV), small businesses may always write an ordinary invoice, on paper or as a PDF, after 2027 too. Since 2025 a small business is one whose total turnover was no more than €25,000 in the previous year and does not exceed €100,000 in the current year; once that second limit is crossed, the scheme ends with the very supply that crosses it. Anyone who voluntarily issues an XRechnung or ZUGFeRD invoice shows no VAT, uses VAT category E with an exemption reason and gives the tax number as identifier if there is no VAT ID. Invoices you receive are kept in their original XML for eight years.
Who counts as a small business
The small-business scheme is set out in section 19 UStG and was rewritten with effect from 1 January 2025. Since then there are two limits on total turnover: no more than €25,000 in the previous calendar year and no more than €100,000 in the current year. The second limit is no longer a forecast as it used to be; it bites immediately, and the supply that crosses it is already taxed normally. Businesses using the scheme charge no VAT and deduct no input VAT.
For e-invoicing this has a practical consequence. Your customers cannot reclaim input VAT from your invoices, because there is no VAT on them. That is why the regulation exempts small businesses from issuing: the form of their invoice makes no difference to the recipient’s deduction.
Receiving: the duty applies to you too
The duty to receive has no size exemption. The Finance Ministry letter of 15 October 2025 names small businesses expressly as recipients who must accept an e-invoice. It sounds more demanding than it is. According to the ministry’s FAQ an email inbox that suppliers send the files to is enough. What you also need is a way to read the XML and storage that keeps it unchanged. The short list shows how ready you are:
Ready to receive
Ready to receive
1 / 4
| Set up an address such as invoices@ | Done |
| Use a viewer or accounting software | Open |
| Pre-check or KoSIT validator before paying | Open |
| Keep the original XML for eight years | Open |
Suppliers that already send small businesses e-invoices are typically phone and internet providers, wholesalers and platforms. If a pure XML file arrives, open it in the viewer and then save it as the original. A ZUGFeRD invoice looks like a normal PDF; here too the embedded XML is the part that counts.
Issuing: optional, but then done properly
Under section 34a sentence 4 UStDV small businesses may always issue an ordinary invoice. This permission does not expire; it holds after 2027 and after 2028. An electronic ordinary invoice, such as a PDF by email, needs the recipient’s consent like any other; paragraph 22 of the ministry letter accepts tacit consent, for example when the customer pays the PDF without objecting.
Some customers still ask for an e-invoice because their accounting only processes XML. The file then follows the same rules as any other, with three particular points:
- VAT category E on every line, a zero rate and no VAT total.
- Exemption reason in field BT-120, such as “Exempt as a small business under section 19(1) UStG”. Without it the check reports error BR-E-10.
- Seller identifier: if there is no VAT ID, enter the tax number, otherwise the file breaks rule BR-CO-26.
The invoice creator handles this case: choose “Sec. 19” under VAT and it sets the category, the exemption reason and the identifier itself. We checked the resulting file with the KoSIT validator.
When the small business becomes a normal one
If you grow beyond the limit, you move to standard taxation and thus onto the normal e-invoicing timetable. Exceed €100,000 in the current year and you must show VAT from that supply on; whether the invoice must already be electronic depends on the year. In 2026 everyone may still use paper or PDF, in 2027 everyone with prior-year turnover of no more than €800,000, and from 1 January 2028 nobody. The details are on e-invoicing deadlines.
Plan the switch in time: setting up invoicing software that produces XRechnung or ZUGFeRD takes a while. For the first invoices the free creator is enough; it stores nothing and transmits no data.