What the 2025 §19 reform means for Shopify merchants
Since 1 Jan 2025, your prior-year turnover may not exceed €25,000 (up from €22,000), and a €100,000 ceiling applies in the current year. The key change versus the old rules: if you exceed the €100,000 current-year limit, you lose the small business status immediately—from the sale that breaches the limit, you must charge VAT.
As a small business you charge no VAT on your invoices and cannot deduct input VAT. In return, there's no markup for your customers, an advantage in B2C. Importantly, §19 is a standalone tax case and has nothing to do with the OSS scheme or reverse charge; those only concern merchants who charge VAT normally.
Why Shopify has no native §19 setting
Shopify is an international platform and doesn't recognise the German "small business" construct as a setting. There's no "enable §19" switch. Instead, you must configure your tax settings so that no VAT is charged on your sales, and ensure your invoices carry the legally required note.
This affects your entire bookkeeping: Shopify's standard order confirmation is not a §14-compliant invoice. You need a tool that automatically adds the §19 note and creates documents in a tamper-proof, compliant way.
Configuring Shopify as a small business: step by step
The following sequence ensures your sales are billed without VAT and your documents are correct:
- In your tax settings, set the VAT rates for your sales regions to 0% or disable tax calculation so prices contain no VAT.
- Make sure product prices are configured as final prices without a tax markup.
- Add the mandatory note to every invoice: "No VAT charged under §19 UStG."
- Ensure the other §14 UStG mandatory fields (full addresses, sequential invoice number, date, description of service).
- Monitor your current-year turnover—as it approaches the €100,000 limit, switch to standard taxation in good time.
Automate invoices instead of editing them manually
Adding the §19 note by hand for every order is error-prone and doesn't scale. With an accounting integration it runs automatically: zrapp transfers your Shopify orders straight to sevdesk or Lexware Office and sets the tax status, including small business logic, correctly per order.
That way, no VAT is shown on any document and the §19 note is added automatically. If you later switch to standard taxation, you change the status centrally instead of touching each invoice.
Small business status in Austria and Switzerland
The small business exemption isn't unique to Germany. In Austria the threshold was raised to €55,000 gross with the 2025 reform (§6 Z27 öUStG); here too you charge no VAT and the corresponding note belongs on the invoice.
Switzerland follows a different logic: VAT liability only starts at a turnover of CHF 100,000, and rates have been 8.1% (standard), 3.8% (accommodation) and 2.6% (reduced) since 2024. So always check the threshold for your country of establishment before configuring Shopify. For multi-country setups, we support you as part of our services.
