Small business lump sum - increase of the turnover limit from 2023 onwards

The small business flat rate is possible for entrepreneurs with income from self-employment or income from business operations, who determine their profit by means of an income-expenditure account and whose sales do not exceed a certain turnover limit. Significantly involved shareholders, managing directors, board members, supervisory board members and foundation board members are exempt from the lump sum. The flat-rate operating expenses amount to 45% of the operating income, up to a maximum of € 18,900, or 20% in the case of a service business, up to a maximum of € 8,400.

A recent legal amendment now also takes into account the development of inflation in the area of small businesses by increasing the amount of € 35,000, which is decisive for the income tax lump sum, by € 5,000 to € 40,000. The increased turnover limit will also apply in cases where additional turnover is generated that is not covered by the flat rate (e.g. income from renting and leasing), so that only the turnover covered by the flat rate may not exceed € 40,000.

Example

Writer S achieves sales of € 37,000 from his writing activity and sales of € 10,000 from a rental activity, i.e. a total of € 47,000. Only the sales from the self-employed activity are relevant for the lump sum. Since these do not exceed the turnover limit of € 40,000, S can apply the flat rate.
The increase in the turnover limit to € 40,000 is to be applied for the first time in the assessment for the calendar year 2023.
Tip: Whether the income tax flat rate method is advantageous from a tax point of view compared to the full cash basis accounting or the basic flat rate method must always be assessed on a case-by-case basis, whereby the relevant advice should only be given on the basis of a well-founded calculation of the advantages.