Section 5: Taxation

§ 19 Taxation of small enterprises

(1) The VAT owed on transactions, within the meaning of § 1 paragraph 1 number 1, shall not be levied from taxable persons resident in Germany or in one of the territories referred to in § 1 paragraph 3, provided that the turnover referred to in sentence 2, plus the VAT attributable, did not exceed Euro 22,000 in the previous calendar year and it is not expected to exceed Euro 50,000 in the current calendar year. Turnover, within the meaning of sentence 1, is the total turnover based on the consideration received, reduced by transactions in fixed assets included therein. Sentence 1 shall not apply to the tax owed according to § 13a paragraph 1 number 6, § 13b paragraph 5, § 14c paragraph 2 and § 25b paragraph 2. In the cases referred to in sentence 1, the regulations relating to the VAT exemption for the intra-Community supply of goods (§ 4 number 1 lit. b, § 6a), the waiver of VAT exemption (§ 9), the separate statement of VAT on an invoice (§ 14 paragraph 4), the statement of the VAT identification number on an invoice (§ 14a paragraph 1, 3 and 7),the input VAT deduction (§ 15) and the declaration obligations (§ 18 paragraph 1 to 4) do not apply. § 149 paragraph 1 sentence 2 of the Fiscal Code and § 18 paragraph 4a shall remain unaffected.

(2) The taxable person can declare to the tax authority by the expiration of the second calendar year following the tax period, that he opts to waive his right to apply paragraph 1. The taxable person shall be bound to this declaration for a period of at least five years. It may only be cancelled with effect from the beginning of a calendar year.

(3) Total turnover is the amount of all taxable transactions, within the meaning of § 1 paragraph 1 number 1, carried out by the taxable person, less the following transactions:

1. transactions, which are VAT exempt according to § 4 number 8 lit. i, number 9 lit. b and numbers 11 to 29;

2. transactions, which are VAT exempt according to § 4 number 8 lit. a to h, number 9 lit. a and number 10, if they constitute incidental transactions.

If the taxable person calculates the tax based on the consideration received (§ 13 paragraph 1 number 1 lit. a sentence 4 or § 20), the total turnover is also to be calculated on this basis. If the taxable person carries out his commercial or professional activities during only a part of the calendar year, the actual turnover is to be annualised. Parts of calendar months are to be treated as full calendar months in this calculation, unless the calculation by days results in a lower annual total turnover.

(4) Paragraph 1 shall not apply to the intra-Community supply of new vehicles. § 15 paragraph 4a shall apply accordingly.