From 2020, small businesses will have an additional option to apply for a simple flat-rate income tax. The prerequisites for this are:

• Income from self-employed work (freelancer) or from commercial operations

• Determination of profits by means of an income-expenditure calculation

• Sales do not exceed 35,000 euros. However, there is a one-time tolerance limit of 40,000 euros within five years

• The right to vote can be chosen for each company.

Excluded from the flat rate are activities of a partner-managing director with more than 25 percent participation, supervisory boards and foundation boards.

Which flat rates apply:

The operating expenses are lumped with the following percentages of operating income: 45 percent for trading companies and manufacturing companies and 20 percent for service companies. In the case of mixed companies, the flat rate is based on the higher turnover.