Invoicing for Yoga Studios: Small Business Rule and VAT

Date Published

Rechnungen für Yogastudios: Kleinunternehmerregelung und Umsatzsteuer

You opened your studio because you want to guide people on the mat. Not because you wanted to write invoices. But invoices are part of the deal. And sooner or later, the question comes up: VAT, yes or no?

The good news: The basics are manageable. Once you understand them, you save yourself stress and sometimes money too. In this article, we go through the most important points. One thing first: This text is an overview, not tax advice. For your specific situation, a tax advisor is the right place to go. More on that at the end.

A quick note on terms: In Germany, the "small business rule" is the Kleinunternehmerregelung, and VAT is Umsatzsteuer. We use the German terms here, since that's what you'll see on official forms and from your tax advisor.

A note on scope: This article describes the rules in Germany. The thresholds, paragraphs and dates mentioned here refer to German tax law. If your studio is based in Austria, Switzerland or another country, different rules apply. Use this as a starting point and check the specifics for your country with a local tax advisor.

Small business or not? The two revenue thresholds

The key term is Kleinunternehmerregelung, the small business rule. It's set out in paragraph 19 of the German VAT Act. Put simply, it means: If your revenue stays below certain thresholds, you don't have to show VAT on your invoices. You don't pay VAT to the tax office and you don't have to file VAT returns. That saves a lot of paperwork.

There are two thresholds, and both have to be met:

  1. In the previous calendar year, your total revenue must not exceed 25,000 euros.
  2. In the current calendar year, it must not exceed 100,000 euros.

One detail matters here, and it often gets mixed up: This is about revenue, not profit. So about what comes in, before you subtract your expenses. A studio can be small in profit and still go over the revenue threshold.

What changed in 2025

The rule was reformed on 1 January 2025. Before that, the thresholds were 22,000 euros and 50,000 euros. They were raised to 25,000 euros and 100,000 euros. For 2026, these values still apply unchanged.

One change is especially important. The upper threshold used to be a forecast at the start of the year. If you estimated it in good faith and then went over it during the year, that was fine. Those days are over. The 100,000 euros are now a hard limit. If you exceed it, you switch to standard taxation immediately. And exactly from the revenue that pushes you over the line. The earlier revenue stays tax-free, everything after it doesn't.

For many small studios, this isn't an issue, because they stay well below this threshold anyway. It's still good to know.

One more relief: If you're starting fresh, you've been automatically treated as a small business since 2025, as long as you stay below the threshold. You no longer have to submit a revenue forecast for that.

Small business, yes or no? Pros and cons

At first, the small business rule sounds like nothing but upside. But that's not always true. Let's look at both sides.

In favor:

  1. Less paperwork. No VAT returns, no monthly effort.
  2. Simpler pricing for private customers. Your participants are usually private individuals. For them, it doesn't matter whether VAT appears on the invoice. They pay the final price. Without VAT shown, you keep more in the end, or your price simply looks more attractive.

Against:

  1. No input tax deduction. This is the most important point. As a small business, you can't reclaim the VAT you pay yourself on purchases from the tax office. If you're investing heavily right now, in equipment, a renovation or gear, that can add up.

That's exactly why there's an option to voluntarily waive the small business rule. It's called opting for standard taxation. It can pay off if you have high expenses that include VAT. But be careful: You're bound to this decision for five years. So think it through. And ideally together with your tax advisor.

What a correct invoice looks like

Even without VAT, you have to write your invoices correctly. A few details always belong on them:

  1. Your name and address
  2. The recipient's name and address
  3. The invoice date
  4. A sequential invoice number
  5. A description of the service, so for example the class
  6. The amount

As a small business, you don't show VAT. Instead, you need a note about the small business rule. These wordings have proven themselves in practice:

  • No VAT is charged in accordance with § 19 UStG.
  • The invoice amount does not include VAT in accordance with § 19 UStG.

For small amounts, there's a simplification. If the total of an invoice is no more than 250 euros, simplified requirements apply. In everyday studio life, this covers the single class or a small pass, for example.

Special case: When classes can be tax-free even without the small business rule

There's a second route to tax exemption that has nothing to do with the small business rule. Certain classes can be exempt from VAT under paragraph 4 of the German VAT Act. This applies, for example, to certified prevention courses or certain educational offerings.

Whether this applies to your offering depends on many factors. For example, on a certification or the type of class. This isn't a blanket case and can't be answered in one sentence. If you offer prevention courses or something similar, go through it specifically with your tax advisor. Real money can be hiding here.

E-invoicing: What applies from 2025 and 2028

You may have heard of the e-invoice and wonder whether you need to do something already. Here's the overview.

Since 1 January 2025, all businesses in the B2B sector have to be able to receive and process electronic invoices. From 1 January 2028, they also have to create and send e-invoices themselves.

For most studios, though, this isn't a big deal. Your participants are usually private individuals. For invoices to private customers, a PDF or a paper invoice is still allowed. And as a small business, you can keep sending your invoices as a PDF or on paper, even after 2028. The e-invoice mainly becomes relevant when you bill other businesses.

Important: This is not tax advice

This article gives you an overview. Nothing more. Taxes are individual and depend on your specific situation. Whether the small business rule makes sense for you, whether a class is tax-free, whether waiving it pays off: Those are questions for a tax advisor. A one-time consultation at the start costs something, but it can save you expensive mistakes. See it as an investment in peace of mind.

Create invoices easily with Slotlify

Writing invoices doesn't have to happen by hand. In Slotlify, invoices are created automatically. When a customer books and pays online, the invoice is generated right away. The payment runs through our partner Stripe. If a customer pays on site, the invoice follows once you mark the payment as completed in the system. And if you run your studio under the small business rule, you simply activate the small business setting. Your invoices are then issued without VAT. You set it up once and don't have to think about it afterwards. That gives you time back for what you actually want to do: Work with people.

Want to see how this works in your studio? Try It Now.