Brief information: New developments regarding the small business lump sum and the small business regulation

Adjustments have been made to the flat-rate scheme for small businesses under income tax following the increase in the VAT threshold for small businesses to €55,000 (gross) from 2025. Previously, the €35,000 (net) plus an excess amount of €5,000 from VAT was used as the basis for the flat-rate scheme for small businesses under income tax. However, as soon as the new VAT small business threshold – including the 10% tolerance limit – is exceeded – which amounts to €60,500 – the small business flat-rate scheme for income tax purposes is no longer applicable for the whole year. Where the flat-rate scheme for small businesses under income tax is applied, the maximum amounts for flat-rate business expenses have been raised from €18,900 to €24,750, and for service-based businesses from €8,400 to €11,000.

As is well known, there have also been far-reaching changes to the small business owner regulation for VAT purposes. For domestic (small) business owners who wish to make use of the small business owner exemption in another Member State from 1 January 2025, the application for exemption must be submitted via the portal specifically set up at the BMF. Furthermore, various reporting obligations (quarterly reporting of turnover, reporting upon exceeding the EU-law threshold, etc.) must be taken into account. Since the beginning of January 2025, the procedure for applying for the small business owner regulation in other EU Member States is available in FinanzOnline (via "External Procedures/Links" in the dashboard on the main page). If the company is entitled to the exemption after reviewing the relevant data, Austria must issue the company with a so-called "small business owner identification number" (KU-ID) with the suffix "-EX".

Image: © Adobe Stock - magele-picture