Selling Worn Underwear: Commercials, Taxes, and What You Really Need to Know
Anyone who sells worn underwear and earns money on a regular basis will sooner or later encounter questions about business registration and tax liability. When do you need a business? What taxes apply? How do you use the Small Business Regulation? This guide gives you a practical overview – understandable, without legal English and with concrete steps that you can implement directly.
Important note: No tax or legal advice
This contribution shall include: General information on business registration and taxes. It shall: No individual tax advice and no legal advice and does not replace the advice of a licensed tax consultant or lawyer. The content is based on publicly available sources and may contain errors or be outdated at the time of reading. For questions about your specific situation, please contact a Tax advisor or specialist lawyer. All information refers to Germany, as of 2026, and may change at any time due to changes in law. Further legal information can be found in Legal hub.
When do you need a business to sell worn underwear?
Whether you need to register a business does not depend on What You are selling, but how You do. What matters is regularity and profitability. Anyone who sells a few items once is in the area of private sale. However, as soon as you earn revenue on schedule and repeatedly, there is a commercial activity from a tax point of view.
The boundary between occasional and commercial sales is not rigidly defined. As an orientation: If you regularly post offers, actively address buyers and your income is more than a sporadic pocket money, you should deal with the topic of business registration. Registering a business means no great bureaucratic effort – and protects you from unpleasant requests from the tax office.
Occasional vs. Regular: Where is the Limit?
Occasional sales, such as when you offer something once or twice a year, usually fall under private sales deals. There is no obligation to register a business here. However, as soon as you sell articles several times a month, maintain your own profile and operate targeted pricing, the tax office recognizes a commercial intention. The amount of your income also plays a role – although there is no fixed euro amount as a threshold. Rather, the overall picture counts.
Business Registration Step by Step: This is how you go
Registering a trade sounds more complicated than it actually is. In most cases, it takes you less than an hour to get everything done. Here is the procedure in detail:
Trade registration at the competent trade office
You register your business with the municipality or city where you live. In many municipalities, this is now online. You need your identity card and fill out the form "Business Registration" (GewA 1). As an activity, you can specify, for example, "Online trade in textiles" or "Sale of clothing articles over the Internet". The fee is between 15 and 65 euros depending on the municipality.
Tax registration questionnaire
After registering for business, the tax office will contact you – or you will be asked to complete the “Questionnaire on tax registration” via ELSTER. Here you specify what income you expect and whether you want to use the small business regulation. You should take this step in a timely manner so that your tax number is assigned.
Get tax number and get started
Within a few weeks you will receive your tax number. This means that you are officially registered as a trader. From this point on, you are required to document your income and expenses. But do not worry: for small businesses, a simple surplus income statement (EÜR) is completely sufficient.
Optional: IHK membership and commercial register
As a small businessman, you automatically become a member of the Chamber of Commerce and Industry (IHK). For annual profits below 5,200 euros, you are usually exempt from the IHK contributions. An entry in the commercial register is not necessary for a small business.
What taxes apply when selling worn panties and underwear?
Once you’re in business, you’ll have to deal with three types of tax: income tax, sales tax and business tax. None of these have to deter you – because especially for smaller sales generous allowances and simplification rules apply.
Income Tax: Your Profit Counts
Your income from the sale of borne items goes along with all other income into your income tax return. Only your profit is taxed – i.e. income minus all operating expenses. The basic allowance is 2026 at around 12,096 euros. Only when your total taxable income exceeds this amount will you pay income tax.
Sales tax: Use small business regulation
As a small business owner according to § 19 UStG, you are exempt from sales tax as long as your net sales in the previous year do not exceed 25,000 euros and are expected to remain below 100,000 euros in the current year (as of 2025/2026). You do not show sales tax on your invoices and do not have to file sales tax advance declarations. For most saleswomen of worn underwear, this regulation is ideal because it significantly reduces the bureaucratic effort.
Trade tax: only relevant from 24,500 euros
Trade tax only becomes due if your annual profit exceeds the allowance of 24,500 euros. For sellers who sell worn items as ancillary earnings, this tax is rarely relevant in practice. If you achieve significantly higher profits at some point, it is worthwhile at the latest then a professional tax advice.
Free amounts and deductible expenses: What you can deduct
One of the advantages of a business registration: You can deduct business expenses from your income. This reduces your taxable profit and thus your tax burden. What are the costs?
Typical operating expenses for female saleswomen
- Purchasing the underwear and textiles you offer for sale
- Packaging material: shipping bags, vacuum bags, cartons, adhesive tape
- Postage costs and shipping fees
- Commissions and transaction fees of marketplaces
- Shared Internet costs if you use your Internet professionally
- Cost of photo accessories or lighting for product photography
- Study or storage room (proportional if you use a separate area)
- Office equipment and accounting software
Important: Keep all receipts and invoices. The tax office can request proof, and a clean documentation protects you from problems with an audit.
Small Business Regulation 2026: Less Bureaucracy, More Focus on Selling
The small business regulation according to § 19 UStG is particularly attractive for sellers of worn underwear. You don’t have to show sales tax on your invoices or submit regular sales tax pre-registrations. Condition (as of 2025/2026): Your net sales in the previous year were below 25,000 euros and are not expected to exceed 100,000 euros in the current year.
For everyday life, this means: You issue simple invoices without VAT ID and indicate on each invoice that you apply the small business regulation according to § 19 UStG. Instead, invest the saved time in your profile, your offers and your customer loyalty.
When is it worth waiving the small business regulation?
In some cases, it may make sense to voluntarily waive the small business regulation and show sales tax. This is especially true if you have high purchase costs and want to get the input tax from these purchases refunded. For most salespeople with manageable material costs, however, the advantages of the simplified control clearly outweighed.
Keeping accounting simple: Practical tips for everyday life
Accounting does not have to be complicated. As a small business owner, you are not obliged to double-entry accounting. A surplus income statement (EÜR) is completely sufficient. You simply list your income and expenses chronologically and determine the profit at the end of the year.
How to organize your finances
Create a separate account or at least a separate folder for all transactions related to your sale. Record each receipt with date, amount and buyer identifier (anonymized ranges). Collect receipts for expenses such as shipping costs, packaging materials or commissions digitally – a photo of the receipt is sufficient in many cases.
Free or inexpensive accounting tools like SevDesk, Lexoffice or even a simple Excel spreadsheet will help you keep track. The key is that you document seamlessly. In an external audit by the tax office, the traceability of your records counts.
Annual accounts and tax returns
At the end of the financial year, you create your EÜR and attach it to your income tax return. For this you use the plant G (income from commercial operations) and the plant EÜR. The delivery takes place via ELSTER. If you have the Proceeds from the sale of items borne As a side income, you earn the profits in addition to your main income.
For the small business regulation 2026 with the new sales limits (25.000 / 100.000 €) see our Small Business Rules Guide. Legal basis for sale can be found under Can you sell worn underwear? and in Legal hub.
Frequent questions about business and taxes when selling worn underwear
Do I have to register a trade if I only sell occasionally worn panties?
For really occasional sales – about a few times a year – there is usually no trade. However, once you sell regularly and with a profit intention, a business registration is required. The regularity and your behavior decide overall, not a single euro amount.
What does a business registration cost and how long does it take?
The registration fee is between 15 and 65 euros depending on the municipality. The process itself usually takes less than an hour – in many cities you can complete the registration completely online. After registration, the tax office automatically reports to you.
How does the small business regulation work when selling worn underwear?
If your net sales in the previous year are below 25,000 euros and are expected to remain below 100,000 euros in the current year, you can use the small business regulation according to § 19 UStG (as of 2025/2026). You then do not show sales tax on your invoices and do not have to file sales tax advance notifications. This saves considerable bureaucratic effort and is the right solution for most saleswomen.
Which expenses can I claim for tax purposes as operating costs?
Everything that is directly related to your sales activity counts as operating expenses: purchase of textiles, packaging materials, postage costs, marketplace commissions, share Internet costs and photo accessories. These expenses reduce your taxable profit and thus your tax burden.
Do I have to pay trade tax on the sale of worn underwear?
Trade tax is only due if your annual profit exceeds 24,500 euros. For saleswomen who sell the article as a secondary income, this tax remains irrelevant in the vast majority of cases. Only at significantly higher profits does it become a topic.
Do I need a tax consultant for my business with worn underwear?
With manageable sales and a simple structure, you can often do the bookkeeping and tax return yourself. A tax advisor is worth it if your income increases, you are unsure about allocating expenses, or if your personal tax situation changes. An initial consultation often brings clarity and is free of charge at many law firms.
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