Small Business Regulation Explanations Part 2

Tax return as a small business owner

Of course, a small business owner must also present his sales and profits to the tax office. The tax office can request the submission of an income surplus invoice , but also a sales tax return or a trade and corporation tax return. In general, however, the effort of such a tax return is limited.

Exceptions, special cases and special features

Two reference values ​​are anchored in the law, on which the small business regulation is based. This is the sales of the last and the expected sales in the current calendar year. Anyone who is in the founding year cannot use the previous figures as a guide. For this reason, it is permitted to make an estimate of the expected annual turnover. This is then used as the basis for assessing the small business regulation.

What if I guess wrong?

Anyone who has to assess themselves and their company can be wrong. For example, anyone who expects only 10,000 euros in income, but ultimately earns 25,000 euros, has to consider the exact circumstances. For example, it is possible that unexpected orders have led to above-average growth. Then the small business status can be retained, but only for this year. In the next year you will automatically fall out of this category. Anyone who expects too little income is generally threatened with retroactive payments. The decisive factor here is always whether you can credibly present your estimates. In this way, one or the other entrepreneur can quickly find it difficult to explain if they make a wrong assessment.

What if I set up a business within a calendar year?

Of course, not everyone becomes self-employed at the start of a new calendar year. Most founders start somewhere in between. However, the limit of 22,000 euros is applied to the full calendar year. So if you want to calculate your requirements for the small business regulation, you have to take the preceding months into account proportionally.

Example foundation in July

If you found your company in July of a financial year, you will actively operate it in 6 months out of 12. If you want to use the small business regulation, you must not achieve more than 8,750 euros, i.e. half of 22,000 euros. So 6/12 out of 22,000 is calculated. It should not be assumed that you can earn the full 22,000 euros in the last three months of a financial year without being subject to sales tax.

Apply for small business regulation

According to WHOLEVEHICLES, anyone who can credibly demonstrate that they will not generate more than 22,000 euros in sales after their establishment and in the first financial year can submit a corresponding application to their tax office. It is of course helpful to have the most accurate and realistic estimate possible on the part of the founder. He should think about how many jobs he can expect in the first year and what the resulting income will look like. Anyone who consciously decides against being classified as a small business owner will make this decision binding for 5 years. This can no longer be reversed, even if the income is well below the 22,000 euros.

Differentiation between small business and small business

The term small business is not necessarily precisely defined. Thus, a small business is of course a normal company because it operates commercial activities, but due to the very low income it is not a commercial business. Small businesses do not have to be registered in the commercial register. Such a small business is usually founded when an entrepreneur has very little start-up capital and starts on a very small scale. They are also not yet subject to any accounting obligation, simply determine their profits via EÜR and can choose the form of actual taxation .

Small businesses, on the other hand, come into contact with tax law. A small business can be a small business, but this is not an obligation. Small businesses are also set up quickly and informally and a simple registration with the trade office is sufficient .


Thanks to the small business regulation, it is possible for small businesses to forego the expense of VAT. The tax offices, for whom the administrative work of small companies subject to VAT is very time-consuming, also benefit from this. If you meet the requirements of a small business, you only need to show your net amount on your invoice, as well as a reference to the small business regulation. A VAT ID is also not necessary, as the tax number is sufficient. It is important, however, to assess yourself correctly when registering, otherwise there is a risk of additional payments.

Small Business Regulation 2