When you start a small business or if your German turnover is lower than EUR 17.500 for other reasons (e. g. place of rendering your service is abroad as in b2b-cases) you can choose to be considered a Non VAT entrepreneur. As a consequence you are considered a private person for VAT reasons. You would not add any VAT on your invoices and you would not file advanced VAT returns. Not charging VAT is positive if you have private clients because they cannot receive the VAT reimbursements. If you have business clients it usually does not matter if you add VAT to your invoices because your customer will receive the VAT back. Exceptions for this are special business sections such as banking and the medical area because these are VAT-free. If you are a “Non-VAT-entrepreneur” you consequently do not get reimbursed the VAT your paying on your incoming bills.
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I am looking forward to talk to you!
Krischan (Kris) Treyde (CV)