SME Scheme – General features
Exemption
It is possible to opt for the SME scheme in Germany.
Transactions excluded from the SME scheme
The following transactions are excluded from the SME scheme:
- Occasional transactions, like the supply before first occupation of a building or parts of a building or the supply of building land,
- Exempt cross-border supplies of new means of transport made from one Member State to another.
National annual threshold
The annual threshold in Germany is 25.000 Euro.
The information on the national annual threshold is available on TEDB.
Domestic SME scheme
Simplified VAT obligations
A small enterprise established in Germany who applies the SME scheme in Germany only (domestic SME scheme) is released from the following VAT obligations:
- to submit more than annual VAT returns
- to issue invoices with VAT
Cross-border SME scheme
The cross-border SME scheme applies in the following situation(s):
- The small enterprise applies the SME scheme in other Member States than the Member State of establishment, or;
- The small enterprise applies the SME scheme both in the Member State of establishment and in other Member State(s).
Simplified VAT obligations
The VAT registration in each Member State where the small enterprise applies the SME scheme is replaced by a single prior notification to be submitted in the Member State of establishment.
The periodical VAT returns are replaced by a single quarterly report for all Member States to be submitted in the Member State of establishment.
Currency
The values of supplies of goods and services to indicate in the prior notification, in the update to a prior notification and in the quarterly reports must be in EUR.
Way of submission
The prior notification, the update to a prior notification and the quarterly reports should be submitted by electronic means on this page and on this page.
Additional simplified VAT obligations
Exempt small enterprises applying the cross-border SME scheme in Germany are released from the following VAT obligations:
- to submit administrative statements for each memberstate
- to issue full invoices
Loss of simplified VAT obligations
Non-compliant small enterprises may be required:
- to VAT register
- to submit periodical VAT returns
Transitional period
Germany does not apply any transitional period in case the national annual threshold is exceeded during the current calendar year. That means in fact the transitional period goes up to 100.000 Euro.
Practical examples of the application of the transitional period and its consequences are available in the Explanatory Notes.
Quarantine
Quarantine period in case of exclusion from the SME scheme
Small enterprises excluded from the SME scheme in Germany are not able to benefit from that exemption during a quarantine period.
You can consult the quarantine period applicable in Germany on TEDB database.
Practical examples on the application of the quarantine period and its consequences are available in the Explanatory Notes.
Quarantine period in case of voluntary departure from the SME scheme
Small enterprises who decide to voluntarily leave the SME scheme in Germany are not able to benefit from that exemption during a quarantine period of five years. You can consult the quarantine period applicable in Germany on TEDB database.
Appeals
Domestic SME scheme
Appeals should be addressed to your Member State of establishment (MSEST).
Cross-border SME scheme
Member State of establishment (MSEST)
Appeals related to the following topics should be addressed to MSEST:
- Union annual turnover
- Prior notification, correction and update to a prior notification
- Exclusion for exceeding the Union annual turnover
- other exclusion undertaken by the MSEST (e.g. assumption that taxable activities have ceased)
Member State of exemption (MSEXE)
Appeals related to the following topics should be addressed to MSEXE:
- National annual turnover
- Denial to access the cross-border SME scheme in MSEXE
- Exclusion for exceeding the national annual threshold/sectoral threshold in MSEXE