Small Business Owner Rule 2026: What You Need to Know When Selling Carried Items
You sell worn underwear and want to know if you have to pay taxes? Since 2025, new sales limits apply in the small business regulation – and these are a real relief for many saleswomen. In this guide you will learn what has changed, whether you need a business and how to process your income correctly. No tax lane, but clear answers.
Important note: No tax or legal advice
This contribution shall include: General information on taxes and business registration. It shall: No individual tax advice and no legal advice and does not replace the advice of a licensed tax consultant or lawyer. The contents are based on publicly available sources (including IHK, Federal Ministry of Finance, ELSTER) and may contain errors or may already be outdated at the time of reading. For questions about your specific tax or legal situation, please contact a Tax advisor or specialist lawyer. All information refers to Germany, as of February 2026, and may change at any time due to changes in law.
What has changed in the small business regulation 2025/2026?
Until the end of 2024, there were quite narrow limits for the small business regulation in Germany. Many saleswomen, who earned on the side with worn textiles, came to the border faster than expected. With the reform, which came into force on 1 Yesnuary 2025, this has improved significantly.
The small business regulation exempts you from the obligation to show sales tax and pay it to the tax office. This means: You make invoices without VAT, do not have to submit VAT advance declarations and save yourself considerable administrative effort. In return, however, you may not make a deduction – You can therefore not deduct material costs, shipping boxes or postage fees as input tax.
The new sales limits (25,000 EUR / 100,000 EUR net)
The most important numbers at a glance: Your Net turnover in Previous year may amount to a maximum of 25,000 EUR (previously it was 22,000 EUR gross). And the net sales in current calendar year must not exceed the threshold of 100,000 EUR – previously this limit was 50,000 EUR gross. Important Change Since 2025: The Boundaries Now Relate to Net turnover (turnover without sales tax), no longer on gross sales. Since you as a small business owner do not charge sales tax anyway, your invoice amount corresponds to net sales.
For the majority of female salespeople who offer part-time worn items, both limits are far from actual annual sales. The increase gives you extra leeway without having to worry about rule taxation immediately. More about the legal classification can be found in our Guide to the Legal Situation.
Transitional rules and reference dates
The new borders apply retroactively from 1 Yesnuary 2025. If you had less than EUR 22,000 in turnover in 2024, you could already benefit from the new regulation at the beginning of 2025. For 2026, this means in concrete terms: If your turnover in 2025 was below EUR 25,000, you will automatically continue to be a small business owner – if you stay below EUR 100,000 in the current year.
Important: As soon as you exceed the 100,000 EUR in the current year, the small business regulation is eliminated immediately – not only at the end of the year, but from the turnover that exceeds the threshold. At this point you have to show sales tax.
Do I have to register a trade?
Many salespeople ask this question first. The short answer: Who sells regularly and with profit intention, needs a trade. Anyone who only occasionally passes on personal belongings without recognizable repetition and profit making, acts privately.
When is it considered commercial?
There is no fixed euro border, from which a trade automatically becomes necessary. Two criteria are crucial: Regularity and Profit intention. If you plan to sell permanently and repeatedly worn underwear – whether weekly or monthly – it is a commercial activity in the eyes of the tax office.
In practice, this means that just a few sales per month over a longer period of time are enough to cross the threshold. If in doubt, register early – this protects against further demands and costs only 20 to 60 EUR one-time.
Hobby sales vs. regular sales
A hobby sale is if you offer something once or very rarely – for example, sorted out clothes without a profit intention. The difference to commercial sales is not in the amount of the amount, but in your intention and regularity.
Anyone who creates a profile, maintains offers and processes orders shows organized sales structures. This clearly speaks for commerciality. Detailed information can be found in Business Guide.
Practical steps for business registration
Business registration is easier than many think. Five steps are enough to set everything up correctly.
Check if your sale is commercial
Do you regularly sell for profit? Then you need a business. Non-recurring private sales are excluded. If you are unsure, register – requests are more expensive than the low registration fee.
Register business with the competent office
Go to the trade office of your city or community – many also offer online registration. You need your ID card and the registration form. The fees range from 20 to 60 EUR depending on the municipality. As a job description, a neutral indication such as “online trade with textiles” or “e-commerce” is sufficient.
Complete questionnaire for tax registration
After registering for business, the tax office automatically registers with you and sends the “Questionnaire for tax registration”. You fill this out via ELSTER (the online portal of the financial administration). The questionnaire contains questions about expected income, legal form and personal data.
Choosing Small Business Regulation Actively
In the tax registration questionnaire you will be asked whether you want to make use of the small business regulation according to § 19 UStG. Check this option if you do not exceed the sales limits. This saves you sales tax advance notifications and simplifies your accounting considerably.
Set up simple accounting
As a small business owner, a surplus income bill (EÜR) is sufficient. Set up a table or use a digital tool like SevDesk or Lexoffice. Record every income and expense – this is enough for the annual tax return and at the same time gives you a good overview.
Sales tax or small business owner – when is what worthwhile?
As a seller of worn articles, you basically have two options: You use the small business regulation or you opt for the standard taxation with sales tax. Both variants have advantages and disadvantages.
In the case of Small business regime Do not show any sales tax on your bills. Your buyers pay the net amount, you keep everything – but also do not have to pay sales tax to the tax office. For this, the VAT deduction is not applicable: The VAT on shipping materials, postage or other business expenses you can not get back from the tax office.
In the case of Standard taxation If you show 19% sales tax on your invoices, pay it to the tax office and can claim the input tax on your purchases in return. This is worthwhile if you have high operating expenses – for professional packaging materials, photography equipment or regular postage costs.
For the majority of saleswomen who also offer linen worn via SecretUndies, the small business regulation is the better choice. The administrative effort remains minimal, you do not need monthly VAT advance notifications and the time saved weighs up the missed VAT deduction in most cases.
Checklist: What You Need to Consider in Small Business Regulation
- Check the previous year's turnover limit: Did your total turnover in the previous year fall below EUR 25,000?
- Current year turnover limit: Are you expected to stay below 100,000 EUR in the current calendar year?
- Issuing invoices correctly: Do not show sales tax, instead insert reference to § 19 UStG
- Not to make a deduction: Operating expenditure cannot be recovered as input tax
- Business registration available: Business registered and completed questionnaire for tax registration?
- Completely document revenue: Record each intake with date, amount and description
- Keep supporting documents: Archive invoices and receipts for at least 10 years
- Annual tax return: Submit annex G (commercial operation) and EÜR as an annex
Income tax and allowances
The small business regime concerns only sales tax. Your income tax is completely independent of this. This is where all your income counts – your salary from the main job plus your profit from the sale of worn items.
The Basic allowance 2026 is about 12,348 EUR per year. Only when your total taxable income exceeds this amount, you pay income tax. For most ancillary earnings, that means your main salary is higher anyway, so your extra profit from the sale will be taxed at your personal tax rate.
Secondary vs. full-time
If you Partial work If you sell, the tax office adds your profit from textile sales to your earned income. Your profit results from income minus operating expenses (shipping, packaging, fees). You enter this profit in the Appendix G of your tax return.
Whoever Main occupation deals with articles carried, has additional aspects to consider: health insurance as self-employed, possible business tax from an allowance of 24,500 EUR profit and the obligation to pay income tax advance payments, if the tax office sets them.
For most saleswomen on SecretUndies, the profit remains manageable – far below the trade tax exemption. A simple EÜR at the end of the year is enough to submit the tax return correctly.
Small Business Regulation 2026: The Major Figures
- Previous year's turnover (net): Maximum 25,000 EUR (previously 22,000 EUR gross)
- Current year's turnover (net): Maximum 100,000 EUR (previously 50,000 EUR gross)
- Basic income tax allowance: Approximately 12.348 EUR (2026)
- Business tax exemption: 24,500 EUR profit
- Business registration: EUR 20–60 unique
- VAT: Not applicable as a small business owner (§ 19 UStG)
Accounting and proof requirements
As a small business owner, you don’t need double accounting and annual accounts. All it takes is one Excess revenue account (EÜR) – i.e. the comparison of income and expenditure over the calendar year.
What you should specifically state: Every receipt with date, buyer reference (no real name necessary – an order number is sufficient), amount and short description. On the expenditure side, postage, packaging material, platform fees and possible advertising costs are added.
Digital tools for easy accounting
You don’t have to buy an expensive accounting program. For starters, a well-structured table in Excel or Google Sheets is enough. Those who like it more comfortable use tools such as SevDesk, Lexoffice or Fastbill. These programs automatically create an EÜR, remind you of deadlines and export the data directly for your tax return.
Supporting documents and storage requirements
Invoices, receipts and bank statements must be kept for ten years as a trader. Digital copies are allowed – a scan or photo of the document is sufficient as long as the information remains legible. Sort your receipts into a folder (physical or digital) by months. This will save you a lot of work at the end of the year if you compile the tax return.
Another practical note: note on each issue for which it was incurred. “Postage” or “shipping boxes 50 pieces” are better descriptions than just a date and an amount. The clearer your records, the fewer questions the tax office has. Further information on Legal framework You will find in our comprehensive guide.
Frequently Asked Questions About Small Business Regulation
Do I have to pay taxes from the first Euro?
No. In the case of income tax, the basic allowance of approximately 12.348 EUR (2026) applies. Only if your entire taxable income – i.e. main job plus secondary earnings – exceeds this amount, income tax becomes due. Sales tax is completely eliminated as long as you use the small business regulation and stay below the limits.
At what amount do I need a trade?
There is no fixed euro amount. The decisive factor is whether you sell regularly and with profit intent. Even with small amounts, there may be a business obligation if you offer articles repeatedly. Occasional private sales without repeat intention and without profit intention remain commercially free. In case of doubt, the registration costs only 20 to 60 EUR and brings legal certainty.
What will change in 2026 compared to 2025?
The new turnover limits of the Small Business Regulation were already introduced as of 1. Yesnuary 2025 and continue to apply in 2026. The previous year’s limit is EUR 25,000, the current year’s limit is EUR 100,000. As of early 2026, no further changes to these thresholds are planned. The basic allowance for income tax was increased to approximately EUR 12,348.
Can I sell part-time and use the Small Business Rule?
Yes, absolutely. The small business regulation is regardless of whether you sell full-time or part-time. As long as your total turnover from the trade (not your salary from the main job) remains below the limits, you can use it. Most of the part-time saleswomen are well below the previous year’s limit of EUR 25,000.
Do I need a tax advisor?
Not mandatory. If you have manageable income and use the small business regulation, you can do the tax return yourself via ELSTER. For more complex situations – for example, high turnover, multiple sources of income or the decision between small business owner and standard taxation – professional advice is worthwhile. A first consultation usually costs between 50 and 150 EUR.
How do I best document my earnings?
Keep each income directly – preferably in a digital table or an accounting tool. Note date, amount, order number and a brief description. Keep all receipts (postage, packaging, fees) as a scan or photo. A monthly overview helps you to keep track and quickly compile the tax return at the end of the year.
What happens if I cross the sales limit?
If you exceed the 100,000 EUR limit in the current year, the small business regulation is eliminated immediately – from the turnover that exceeds the threshold. You must then show sales tax, regularly submit advance notifications and pay the tax to the tax office. In return, you can then claim input tax on your business expenses. If your previous year’s turnover exceeds EUR 25,000, the standard taxation applies automatically from the following year.
Final note
All figures, thresholds and regulations mentioned in this article are based on publicly available sources (including the Cologne Chamber of Commerce, the Federal Ministry of Finance, ELSTER) and reflect the status of February 2026. Tax regulations may change at any time. This contribution shall: No tax advice and no legal advice within the meaning of the Tax Consulting Act (StBerG) or the Legal Services Act (RDG). For a binding assessment of your personal situation, please contact an approved tax consultant or specialist lawyer for tax law.
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