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Do I have to show sales tax on my invoices as a small business owner?

March 29, 2024 | 40,00 EUR | answered by Felix Schönecker

Dear VAT consultant,

I am Uwe Schmid, a small business owner in the IT services sector. Lately, I have heard that small business owners do not have to show VAT on their invoices. Is this true? I am unsure if I have been doing everything correctly so far and want to make sure that I am not making any mistakes.

I have not shown VAT on my invoices so far, as I thought it was not required for small business owners. However, I now have concerns about whether this is actually the case and if I may have needed to indicate VAT after all. I do not want to risk any legal issues and am therefore seeking clarity on this matter.

Could you please explain to me if I, as a small business owner, have to show VAT on my invoices? If not, what are the requirements for this and how can I ensure that I am doing everything correctly? If I have already made mistakes, how can I correct them and what consequences could result from them?

Thank you in advance for your help and support.

Sincerely,
Uwe Schmid

Felix Schönecker

Dear Mr. Schmid,

Thank you for your inquiry regarding the VAT liability as a small business owner in the field of IT services. It is correct that small business owners according to § 19 UStG do not have to show VAT on their invoices if they opt for the small business regulation. This regulation applies to companies that have generated a turnover of no more than 22,000 euros in the previous year and are not expected to exceed 50,000 euros in turnover in the current year.

So, if you are operating as a small business owner and do not exceed the mentioned turnover limits, you are exempt from VAT and do not have to show VAT on your invoices. It is important that you note this on your invoices accordingly, for example by indicating the application of the small business regulation.

If you have incorrectly shown VAT on your invoices in the past, it is advisable to correct this. You can do this, for example, by issuing a corrective invoice in which you retract the excess amount shown. It is important that you proceed carefully in order to avoid any tax consequences.

It is advisable to seek advice from an experienced tax advisor in tax matters to ensure that you comply with all legal regulations. As an expert in VAT, I am available to clarify any questions you may have and to support you in implementing the small business regulation.

I hope that I have comprehensively answered your question and am available for further information.

Best regards,
Felix Schönecker