Taxes When Selling Worn Underwear: What You Need to Know
You make money selling worn underwear and wonder how it goes for tax? Don’t worry – the rules are manageable. This guide explains free limits, business registration and tax obligations in understandable language. Without technical Chinese, with clear recommendations for action.
Important note
This guide provides general guidance and does not replace tax advice. For specific questions about your personal situation, contact a tax consultant. The regulations mentioned here refer to Germany (as of 2026) and may change.
First things first: the basic rules
Earnings from the sale of worn underwear are generally taxable – just like any other income. This sounds complicated at first, but it is not. Most saleswomen in the side business fall under simple regulations.
The three most important questions
- Do you need a business? Yes, if you sell regularly and with profit intent.
- Do you have to pay VAT? Usually no, thanks to small business regulations.
- Do you have to pay income tax? Only if your total profit is above the free amounts.
For most ancillary earnings, this means: register business (one time, under 50 euros), document income, specify in the tax return at the end of the year. Finished.
Until this annual turnover, you are exempt from sales tax. For most of the side earners, completely sufficient.
Business Registration: How, where and why
When do you need a business?
Once you sell regularly and have the intention to make a profit, it is a commercial activity. “Regular” does not mean daily – even weekly or monthly sales count. Individual occasional sales (e.g. old clothes from the closet) are not included.
If in doubt: If you plan to sell permanently, register a trade. This protects you from further demands and trouble with the tax office.
Then you sign up.
- Go to the trade office of your city (often online)
- Fill in the form "Business Registration"
- Pay the fee (usually 20-50 euros)
- Ready – you get a business license
Which activity to specify?
Choose a neutral description such as:
- "Online trade in textiles"
- "Selling goods over the Internet"
- "E-Commerce / Online Commerce"
You don’t have to write “selling worn underwear.” Neutral formulations are completely fine and common.
From registration to tax declaration
Registration
Unique at the trade office, costs under 50 euros. You get a business license.
Questionnaire from the tax office
The tax office will automatically send you a questionnaire. Here you choose the small business regulation.
Document receipts
Keep a simple list: date, amount, type of sale. An Excel spreadsheet is enough.
Collecting expenditure
Keep receipts for underwear, packaging, postage, platform fees. They reduce your profit.
Tax declaration
At the end of the year, you enter income and expenses into the plant G (business).
Understanding the Small Business Regulation
What is the Small Business Regulation?
According to §19 UStG, you can be exempt from VAT if your annual turnover is less than 22,000 euros. This means: You do not have to show, pay or make sales tax pre-registrations.
Benefits
- No VAT on your invoices/receipts
- No monthly or quarterly reports to the tax office
- Less bureaucracy overall
Disadvantage
You cannot claim input tax. This means that the VAT you pay when shopping (e.g. underwear, packaging) cannot be returned. With the typical purchases in the side business, however, this is usually no problem.
This is how you activate them
In the tax registration questionnaire sent by the tax office, you simply tick "Small Business Regulation". Finished. You can also change afterwards, but then you are bound for 5 years.
Important limits and allowances
| Border | Amount | Significance |
|---|---|---|
| Small business limits | 22,000 € Turnover/year | Until now, no sales tax is necessary |
| Hardness compensation Additional income | 410 € profit/year | Up to here completely tax-free |
| Basic allowance (done) | ~11,600 € total income | No income tax until now |
| IHK contribution freedom | €5,200 profit/year | No IHK contributions so far |
| Business tax allowance | 24,500 € profit/year | No business tax so far |
Practical example: side earning 400 euros/month
You earn 400 euros monthly = 4,800 euros annual turnover. From this you deduct expenses (underwear, packaging, postage, platform fees) – let’s say 1,000 euros. Your win: 3,800 euros. This is well below all relevant limits. Result: No sales tax, no business tax, no IHK contributions. Only income tax on the profit, and this is most within the framework of the basic allowance or the progressive tax rate manageable.
Income Tax: What's Left?
How is it taxed?
Your profit from the underwear sale is added to your remaining income (salary, other ancillary income, etc.). On the total income, you pay income tax according to the progressive tax rate.
The Good News
Ancillary income up to 410 euros profit per year is completely tax-free (hardship compensation). And even if you earn more: You only pay taxes on profit, not on sales. All expenses (underwear, packaging, postage, platform fees) reduce profits.
What you can do
- Buying the underwear (pick up receipts!)
- Packaging material (bags, envelopes, tape)
- Porto and shipping costs
- Plattformgebühren/Provisionen
- Shared Internet costs (estimated 5-10%)
- Shared mobile costs (if you use it for communication)
- Work equipment (camera, if primarily for product photos)
Professional tip: Simple accounting
You don’t need complicated software. An Excel table with the columns "Date | Income / Expenditure | Amount | Description" is completely sufficient. Number your receipts and assign them to the table. So you have everything at hand in a question from the tax office.
Practical tips for everyday life
Separate account
Not absolutely necessary, but practical: Open a free business account (many direct banks offer this). Thus, private and business expenses are neatly separated, and accounting becomes easier.
Secure documents digitally
Take photos or scans of all receipts and save them to a folder. Paper receipts fade – digital not. The tax office accepts digital copies.
Quarterly overview
Instead of working up everything once a year: Make a short overview every month or every quarter. 15 minutes is enough. This is how you avoid stress at the end of the year.
Reserves shall consist of:
Set aside about 20-25% of your earnings. If tax payments come, you are prepared. If there is no back payment, you have a nice bonus.
Checklist: Taxes under control
- Business registered
- Questionnaire sent to the tax office (small business owner elected)
- Revenue table created
- Supporting documents collected
- Monthly/quarterly overview made
- Reserves formed for taxes (20-25%)
- Tax return submitted with Attachment G
Frequent errors cleared up
"I don't have to give small amounts"
Wrong. As a general rule, all income must be declared. The exemption limits (like the 410 euros) do not mean that you do not have to report anything – they only mean that you do not pay taxes until then.
“The tax office doesn’t know that.”
Risky. Platforms may be obliged to provide information during tax audits. In addition, tax evasion is not a trivial offence and can be expensive. It is not worth taking risks for a few hundred euros.
“I need a tax advisor.”
For simple side earnings usually not necessary. The income surplus bill (EÜR) is simple, and you can do the tax return yourself. In more complex cases (high income, several activities), a tax consultant can be useful.
"I have to book each sale individually"
Not necessarily. For many small amounts, you can sum up daily income. It is important that the sum is right and you have the individual receipts in case of doubt.
Frequent Questions About Taxes When Selling Underwear
When do I have to register a business?
As soon as you sell regularly and with profit intention. “Regular” does not mean daily – even weekly or monthly sales count. When in doubt: Better to register. The cost is low and you are on the safe side.
Does my employer see that I have a side business?
Not automatically. Your employer only finds out if you tell him – or if the tax return collects church tax from the employer. You can avoid this by submitting an application to the tax office for a separate assessment.
Do I have to pay VAT?
With the small business regulation (less than 22,000 euros annual turnover) not. You choose this option in the tax entry questionnaire. Then you do not have to show or pay sales tax.
What happens if I earn more than 22,000 euros?
Then you lose small business owner status and have to calculate sales tax (19%) on your sales. You have to pay them to the tax office, but you can claim input tax. At this level of turnover, a tax consultant is often worthwhile.
Can I do this alongside an employee relationship?
Yes, basically yes. But check your employment contract: Some contracts require you to register side jobs. However, the approval is almost always granted if there is no competition with the employer.
How detailed should my accounting be?
As a small business operator, a simple income surplus bill (EÜR) is sufficient. This is basically a list of all income and expenses. No double bookkeeping, no complicated software necessary.
