Germany E-Invoicing €800,000 Threshold: Start-Ups and Groups

Germany's e-invoicing €800,000 threshold applies to total turnover in calendar year 2026 (§ 27(38) no. 2 UStG). The special cases come down to attribution: a sole trader's side businesses are added together, sister companies without a VAT group are tested separately, and with self-billing the customer's turnover counts. The law does not annualise a short first year.

The basic rule, the full wording of the transitional provision and a VAT group with figures are in our guide to Germany e-invoicing 2027. This article covers the cases where "which turnover, which business, which year?" has no obvious answer. These cases come up often for founders, expats with more than one activity, and German subsidiaries of international groups.

What you need before you calculate

Collect these documents first:

• payments received in calendar year 2026 (bank statements or an open-items list), because German VAT law counts payments received (vereinnahmte Entgelte), not invoices issued;
• a list of every activity you carry out as a business: trade, side business, rental, freelance work;
• for groups: the shareholder structure and, if one exists, confirmation of a German VAT group (umsatzsteuerliche Organschaft);
• contracts in which your customer bills itself (self-billing, Gutschrift) or a service provider invoices on your behalf;
• your 2026 advance VAT returns (Umsatzsteuer-Voranmeldungen) as a plausibility check.

Section 19(2) of the German VAT Act (§ 19 UStG) defines total turnover (Gesamtumsatz) as "the sum of the taxable supplies carried out by the business, calculated on the basis of payments received". Exempt supplies under § 4 no. 8(i), no. 9(b) and nos. 11 to 29 UStG are deducted; supplies under § 4 no. 8(a) to (h), no. 9(a) and no. 10 UStG only if they are ancillary. Sales of fixed assets are ignored. Amounts are net, because the consideration (Entgelt) excludes VAT under § 10(1) UStG.

Step by step: test the threshold in five questions

1. Who is the business? Identify the unit whose turnover counts: a sole trader with all activities, each company on its own, or the whole VAT group. Result: one unit to calculate for.
2. Who issues the invoice? With self-billing it is your customer; with an invoicing agent it is still you. Result: you know whose threshold applies.
3. Which year counts? Always calendar year 2026, even with a different financial year or a start-up during the year. Result: 1 January to 31 December 2026.
4. Which amounts count? Payments received in 2026, net, without supplies that are outside the scope of German VAT, without the deductible exempt supplies, without fixed assets. Result: total turnover 2026.
5. Is it €800,000 or less? Then you may use paper or, with the customer's consent, PDF for supplies made in 2027 if you send the invoice by 31 December 2027. Otherwise, e-invoices are required for supplies to German businesses from 1 January 2027.

The special cases below show where these steps get stuck in practice.

Start-ups in 2026: short year or annualised figure?

Muster Design GmbH was founded on 1 September 2026. In four months it received €290,000 net. Annualised, that would be €870,000.

§ 27(38) no. 2 UStG requires that the total turnover "in the previous calendar year did not exceed 800,000 euros". Neither that provision, nor § 19(2) UStG, nor paragraph 64 of the BMF letter of 15 October 2024 converts a short year into a full-year amount. On the wording, the first row applies: €290,000. Paragraph 64 contains no explicit statement on annualising, so a business that would be just above the threshold should confirm its position with a German tax adviser.

In practice, many such companies issue e-invoices from 2027 anyway. The transitional rule ends on 1 January 2028 in any case, and larger customers often ask for structured data.

A financial year that is not the calendar year

Beispiel Bau GmbH has a financial year from 1 July to 30 June. The threshold still uses the calendar year, because the law says "calendar year" (Kalenderjahr).

At €815,000 the company is above the threshold, although its annual accounts for 2025/26 show less. The calendar-year figures come from the advance VAT returns, which always run by calendar year.

Start-ups in 2027

A business founded in 2027 had no turnover in 2026. On the wording of the law, the condition "did not exceed 800,000 euros" is met. The BMF letter of 15 October 2024 does not address this case explicitly. Many new businesses are also covered by the small-business rule (Kleinunternehmerregelung), which permanently exempts them from issuing e-invoices (§ 34a of the VAT Implementing Ordinance, UStDV).

Side businesses: is the turnover added up?

Yes. § 2(1) UStG states: "The business comprises the entire commercial or professional activity of the entrepreneur." A sole trader has only one business for VAT purposes, however many trade registrations they hold. This matters for expats who combine freelance work with a second activity.

Example: Ms Muster is a freelance IT consultant, runs an online shop on the side, and lets a shop unit to a bakery.

Without the option, the rent is exempt and is deducted under § 19(2) no. 1 UStG. If Ms Muster opted to tax the rent, it is no longer an exempt supply and counts. She is then above the threshold for all three activities: her consulting invoices to German companies must also be e-invoices from 2027. Online-shop invoices to consumers are not affected, because B2C invoices never require an e-invoice.

Turnover of other people is not added. A spouse with their own sole proprietorship tests the threshold separately. A partnership (GbR) is a separate business with its own threshold.

Groups and foreign parents: each company on its own

The threshold applies to the total turnover "of the business issuing the invoice". Every company is a separate business. Only in a VAT group under § 2(2) no. 2 UStG (financial, economic and organisational integration) does the turnover of the whole group (Organkreis) count, according to paragraph 64.

Example: a private shareholder holds 100 % of two German companies. The shareholder is not a business, and there is no VAT group.

Each company may still issue paper or PDF invoices in 2027. Supplies between the sister companies are taxable here, unlike inside a VAT group, and count for the company that makes them.

The same logic applies to a German GmbH owned by a foreign parent. The German company tests its own total turnover, and the parent's worldwide revenue is not part of the calculation. If a VAT group exists, § 2(2) no. 2 UStG limits its effects to the parts of the business in Germany. Whether a VAT group exists is a legal question; a shareholding percentage alone does not answer it.

Self-billing and invoicing agents: whose threshold applies?

Paragraph 64 of the BMF letter of 15 October 2024 covers both cases: "If the invoice is issued in the form of a self-billed invoice (§ 14(2) sentence 5 UStG), the total turnover of the issuer of the self-billed invoice is decisive. If the invoice is issued by a third party not involved in the supply, the total turnover of the principal is decisive." (our translation)

Example: Muster Logistik GmbH (total turnover 2026: €2.4 million) pays its subcontractors through self-billing. Beispiel Transporte e. K. had only €300,000 in 2026 and could still send its own invoices on paper in 2027. For the self-billed invoices, however, the logistics company's turnover counts: they must be e-invoices from January 2027. The reverse also holds: a small customer below €800,000 may still issue paper or PDF self-billed invoices to a large supplier.

If an outsourced billing provider creates your invoices, nothing changes: your own turnover counts, not the provider's.

Close to the threshold: what moves the result?

Near €800,000, details decide. Muster Elektro GmbH booked sales invoices of €836,000 net for 2026.

The company is €17,000 below the threshold. A single payment arriving on 30 December instead of 4 January could have changed the result. Three consequences:

• The result is only certain after 31 December 2026. If you are within about 10 % of the threshold either way, prepare both paths.
• Early-payment discounts (Skonto) reduce the payment received; the amount actually paid counts.
• What happens in 2027 does not matter. If the company passes €800,000 during 2027, the transitional rule still applies to supplies made in 2027.

Whether an invoice falls under the obligation at all, regardless of turnover, is covered in our checklist of Germany e-invoicing exemptions.

Common calculation mistakes

How to check and create invoices with docutools.pro

None of our tools calculates the €800,000 threshold; that needs your accounting figures. These tools help before and after:

1. Rule out small-business status. For start-ups, run the Kleinunternehmer calculator first. Enter the prior-year figure in "Tatsächlicher Umsatz Vorjahr (Netto, €)" or leave it empty in the founding year, then click "Jetzt prüfen". With no prior year, it tests against €25,000. It runs in your browser.
2. Create an e-invoice if you are above the threshold. The ZUGFeRD invoice generator works without an account: "Company", then "Items", then under "Generate & download" choose "ZUGFeRD PDF" (marked as recommended) or "XRechnung XML". Your input is sent to our server for this. The generator does not create self-billed invoices (type code 381).
3. Check the mandatory details. In the German invoice requirements checker, choose the "XRechnung/ZUGFeRD XML" mode and click "Auto-check XML". It always marks the supply date, the exemption note and discounts as missing, so tick these by hand.
4. Validate the file. Check a generated XRechnung in the XRechnung validator against the KoSIT rules. The free plan allows two uploads per day up to 500 KB; the Pro plan removes these limits.

What to do after the calculation

• Document the calculation with figures and sources, ideally as a table like the ones above, and file it with your 2026 tax records.
• If you are below the threshold, record your customers' consent to PDF invoices. It needs no particular form and can be part of your terms and conditions (BMF letter of 15 October 2024, para. 63).
• If you are above it, switch your invoicing software before 1 January 2027 and tell customers who still receive paper.
• Invoice December 2026 supplies in December.
• More guides on deadlines and scope are on our e-invoicing mandate hub, and the full timeline is in the guide to the Germany e-invoicing mandate.

Open questions

• Annualising a first year: the law and paragraph 64 contain no conversion rule, and the BMF letter of 15 October 2024 makes no explicit statement on it.
• Conversions and business transfers: whether a company founded in 2026 that took over an existing business must count its predecessor's turnover is not addressed by § 27(38) UStG or paragraph 64.

Sources

• § 27 UStG, subsection 38 (transitional rule and €800,000 threshold) (opens in a new tab)
• § 19 UStG, subsection 2 (total turnover) (opens in a new tab)
• § 2 UStG (business, VAT group) (opens in a new tab)
• § 14 UStG, subsection 2 (self-billing, invoices by third parties) (opens in a new tab)
• § 3a UStG, subsection 2 (place of B2B services) (opens in a new tab)
• BMF letter of 15 October 2024, BStBl I p. 1320, paras. 62 to 65 (IHK mirror, German) (opens in a new tab)

Last reviewed: November 2026

This article is general information, not tax or legal advice.