Flat-rate expenses

Definition

The standard flat-rate expense scheme (Basispauschalierung, § 17 Abs 1 EStG) lets the self-employed and trade licence holders deduct business expenses as a percentage of turnover instead of collecting every receipt. One line in the tax return replaces a full income-and-expenditure account.

Rates and caps 2026

The general rate is 15 % of net turnover, capped at € 63.000. A reduced rate of 6 %, capped at € 25.200, applies to commercial or technical consulting, materially participating managing shareholders, supervisory board members, property managers, and writing, lecturing, scientific, teaching and educational work.

The rates were raised recently: in 2025 the general rate was 13.5% with a €320,000 turnover limit; from 2026 it is 15% with a €420,000 limit.

Requirements

The business's prior-year turnover must not exceed € 420.000, there must be no obligation to keep books (as there is for a GmbH), and no voluntary double-entry bookkeeping. The tax return must state that the flat rate is being used.

What stays deductible on top

Alongside the flat rate you may still deduct goods purchased, wages and wage-related costs, subcontracted work, your own compulsory SVS contributions, pass-through travel costs, the workplace allowance, a share of public transport passes, and the basic part of the profit allowance. The investment-based profit allowance, by contrast, is not available while a flat rate applies.

Lock-in when switching

If you switch from the flat rate to a full income-and-expenditure account, you may only switch back after five business years, so a year-end comparison is worth doing. The SVS and tax calculator lets you compare both.