Review of invoices
An invoice is a document with which an entrepreneur, or a third party on behalf of the entrepreneur, bills a delivery or other service with regard to the beneficiary.
In Germany there is a duty to keep records for at least ten years (incoming and outgoing invoices). Invoices must be written for sales to companies in particular. However, there is also a duty to write invoices to private individuals, for example, when the delivery threshold in mail order business with private individuals in Germany is exceeded.
Required information on the invoice
It is particularly important regarding the pre-tax deduction that all the required information is included on the invoice. The details according to VAT law are as follows:
- Complete name and complete address of the entrepreneur providing and the beneficiary receiving the goods/service
- The entrepreneur’s tax number issued by the tax office or the VAT identification number issued by the Federal Tax Office
- Date of issue
- A consecutive number, with one or more digits, given to identify the invoice from the invoice issuer and only assigned once (invoice number)
- The amount and type (customary description) of the delivered items or the type and range of the other service. Customary is any business description used for an item, for example, branded products’ labels. The details must enable the exact identification of the invoiced product/service.
- The itemized charge for the delivery or other service according to tax rate and separate tax exemptions, as well as any reduction of charge agreed in advance (e.g. discounts), as far as they have not already been accounted for in the charge
- The applicable tax rate as well as the applicable tax amount or in case of tax exemption, reference that the delivery or other service is tax-exempt.
In the case of exceptions such as e.g. credit notes, so-called self-billing invoices from the beneficiary, intra-community deliveries or reverse charge, there are special provisions which must be observed. As long as the invoice amount (including VAT) is not more than €150 a so-called invoice for small amounts can be issued, which must include the following details only:
- Name and address of the entrepreneur providing the goods/service
- Date of issue
- Amount and type of the delivered items or the amount and type of other service
- The charge and tax amount included in one amount as well as
- The relevant tax rate or
- In case of tax exemption, reference that the delivery or other service is tax free
Summary of the most important points
- The customer can request an invoice on delivery or provision of a service to companies.
- An invoice doesn’t have to be issued for delivery or service to private individuals, with some exceptions.
- There are reduced compulsory details for so-called invoices for small amounts.