Taxes for bands in Germany: the three questions before the first invoice

This applies to a band based in Germany and self-employed there — the thresholds, the forms and the Finanzamt are German, and residence is what makes them yours. Before that band writes its first invoice, three questions want settling. All three you answer yourselves in an evening; the second is also the one whose edge case makes a Steuerberater — a German tax adviser — due. Settle them before the first invoice and there is little to discuss with the tax office; sort it out afterwards and there is plenty.

Question 1: Kleinunternehmer — yes or no?

If your turnover stays under 25,000 euros in the previous year and under 100,000 in the current one, you can operate as a Kleinunternehmer, a small business under § 19 UStG: no VAT on your invoices, no VAT returns. In the year you start, the Federal Ministry of Finance applies the 25,000-euro line to the current year instead (letter of 18 March 2025, section 19.1 (3) UStAE). For a band at the start, that is the normal case.

The price: you get no VAT back on your own expenses. As long as you earn more than you invest, the trade is good; if you are about to buy an expensive PA, run the numbers once. The invoice then carries a note that no VAT is shown per § 19 UStG — one line.

Question 2: freelance or trade?

Performing, composing, writing — artistic work is freelance (§ 18 EStG). Concretely: no trade registration, no trade tax, no chamber of commerce. For a band living on fees and royalties, that is the honest default answer.

Trade begins where trading does: merch sales at any real scale are commerce, and artistic they are not. If you do both — play and sell — you sit in the edge case, and edge cases are the moment for the Steuerberater. The first fee is not.

Question 3: what do you keep?

Everything that moves money, with its receipt: your invoices, other people's invoices, till slips, bank statements. A freelance band's profit calculation is the simple sum of income minus expenses (§ 4 Abs. 3 EStG) — a binder and a spreadsheet where every row has a receipt will carry it.

The simple rule: no entry without a receipt, no receipt without an entry. A band till that passes through three pairs of hands in cash is the classic gap — whoever runs it, writes it down.

The short version

Under 25,000 euros of prior-year turnover and 100,000 in the current year you are a Kleinunternehmer and leave VAT off; in your first year, the 25,000-euro line applies to the current year. Whether the line counts for the band or per member depends on who agrees the gigs. Performing and writing are freelance, trading is trade, and the mixed case belongs with a Steuerberater. Keep everything with a receipt, calculate income minus expenses, and get the tax number via the ELSTER questionnaire — before the first invoice.