The Kleinunternehmerregelung under Paragraph 19 of the Umsatzsteuergesetz is treated as a simplification for the start, and that is what it is. Whether it is worth it for you, though, hangs on a question that is rarely asked: who pays your invoices? In the erotic industry those are usually production companies, and from that follows a calculation that comes out differently than for a sideline with private customers. This article explains what the scheme does, whom it actually helps, what it costs you and how the switch works.
What the scheme does
Anyone who uses the Kleinunternehmerregelung does not show VAT on their invoices and does not remit any to the tax office. Instead of a tax rate and a tax amount, the invoice carries a note on the tax exemption.
The price for that is the input-VAT deduction. You cannot reclaim the VAT that sits in your own expenses. Camera, lights, laptop, train journeys, hotel, cosmetics for the work, tax advice: the gross price remains your cost.
The distinction matters: this is exclusively about VAT. You pay income tax on your profit in any case, and the duty to record income and expenses does not fall away either. The scheme takes one type of tax off you, not the bookkeeping.
The turnover thresholds and why no figure stands here
The scheme is tied to turnover thresholds: one for the previous calendar year and one for the current year. We deliberately do not name the amounts here. They have been raised several times in recent years, and a figure in a magazine article is only correct until the legislator changes it.
The reliable information you get from the tax office or your tax adviser, at the moment you take the decision. You should not rely on previous-year figures from forums, blog posts or older guides.
Two points matter independently of the amount. First, turnover from all self-employed activities counts together, not only that from shoots. Anyone who additionally runs a fan channel or does webcam adds that. Second, the first year is considered pro rata if you start in the middle of the year.
The decisive point: are your customers entitled to deduct input VAT?
This is the core of the decision. The Kleinunternehmerregelung gives you a competitive advantage if your customers cannot reclaim the VAT. With private customers that is so: for them your invoice without tax is simply cheaper.
Production companies, by contrast, are usually entitled to deduct input VAT. For them the VAT shown is a pass-through item that they get back from the tax office. Whether tax stands on your invoice or not changes nothing about the costs for the production.
From that follows the uncomfortable balance: with production companies as clients the scheme gives your customer no advantage, and it costs you the input-VAT deduction on every investment. The disadvantage sits entirely with you.
When it is still worth it
There are good reasons to use it. The most obvious is the effort: no VAT advance returns, no splitting by tax rates, no question which rate applies to which service. Anyone who shoots two or three times a year and invests little saves time and nerves without losing much.
It is also worth it if your income comes predominantly from private persons. Anyone who earns mainly through their own fan channel or webcam sells to end customers. Caution: with platforms it depends on whether the platform pays you or your customer does, and how the platform builds its statement. That is a question you settle once with the tax adviser and then never again.
And it is worth it in the starting phase, when it is still open whether individual shoots will become a lasting activity. Which orders of magnitude are realistic is in our overview of earnings.
When it becomes expensive
It becomes expensive as soon as you invest. A calculation path without invented figures: suppose you buy equipment and kit and add travel, accommodation and advice on top. At the regular VAT rate of 19 percent, just under 16 percent VAT sits in these gross expenses. Under standard VAT taxation you reclaim that share; as a Kleinunternehmer you do not.
On the income side there is no matching advantage with production companies as customers, because under standard VAT taxation you simply invoice the net amount plus tax and pass the tax on to the tax office. Your fee stays the same; your expenses become cheaper.
The threshold is therefore not a turnover figure, but your expense structure. Anyone who buys nothing loses nothing. Anyone who builds their own production kit pays for the simplification.
A second point belongs here, even if it is uncomfortable: which tax rate applies to your service is not clear in every case, because a performing service and the grant of usage rights can be treated differently. Under the Kleinunternehmerregelung that question does not arise; under standard VAT taxation it does. It belongs among the things you have clarified professionally once, instead of estimating them.
Switching: waiver, lock-in and the way back
You can waive application of the scheme and switch voluntarily to standard VAT taxation, even if you sit under the thresholds. The waiver has to be declared to the tax office, and it binds you for several calendar years — under the usual handling, five. The current duration and the form of the declaration the tax office confirms to you before you submit it.
In the other direction the matter becomes automatic: anyone who exceeds the thresholds is under standard VAT taxation in the following year, without anyone reminding them. Anyone who misses that issues invoices without VAT, still owes the tax and has to claim it afterwards from customers who have long since paid.
That is why the turn of the year is the date on which you add up your turnover. Anyone who does that in January has time to react, instead of declaring an extra payment in November. How these deadlines sit with trade registration and a tax reserve is in our article on trade registration and tax for performers.
What you can settle in one appointment
This decision is a calculation with four quantities: expected turnover, expected expenses, type of customers and willingness to take on administrative effort. A one-off appointment with a tax adviser answers that for your situation better than any article, including this one.
Take with you: an estimate of your shoot days, a list of planned purchases and the information whether you additionally sell to private customers through your own channels. Anyone who has these three details ready is done in twenty minutes and has the answer for the next years. Which other questions come up regularly we collect under frequently asked questions.
Note: This article provides a general overview and is not a substitute for tax or legal advice.
Questions about this?
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