- SME Scheme Overview: Small enterprises in Germany can opt for an SME scheme, which simplifies VAT obligations, including exemptions from submitting more than annual VAT returns and issuing VAT invoices. The national annual threshold for this scheme is set at €25,000, with specific transactions excluded, such as certain building supplies and exempt cross-border transport.
- Cross-Border and Domestic SME Schemes: The cross-border SME scheme allows small enterprises operating in multiple Member States to streamline their VAT obligations by submitting a single prior notification and quarterly report to their Member State of establishment, rather than registering in each country. Exempt small enterprises under this scheme are relieved from submitting administrative statements and issuing full invoices.
- Transitional and Quarantine Periods: Germany does not implement a transitional period for enterprises exceeding the national annual threshold, which is effective until €100,000. Excluded enterprises face a quarantine period during which they cannot benefit from the SME scheme, and those voluntarily leaving the scheme are subject to a five-year quarantine before reapplying. Appeals related to the SME scheme are directed to the respective Member State of establishment or exemption, depending on the issue.
Source ec.europa.eu
