You have recently started a new business in Germany and you are excited that you have found your first customers. Now you want to go ahead and issue your first invoices. Before you do so, make sure you have included all legally required information. Section 14 of the German Value Added Tax Act (Umsatzsteuergesetz, UStG) stipulates a number of mandatory details for invoices. They include:
- Full name and address of the issuer
- Full name and address of the recipient
- Consecutive invoice number (important!)
- Tax number or VAT identification number of the issuer
- Date of issue of the invoice
- Date of delivery or service
- Quantity and type of product delivered or type and scope of service provided
- Agreed bonuses, rebates, discounts (if not already included in the stated invoice amount)
- Statement of the applicable VAT rate (currently 16 %, as of December 2010)
- Statement of net invoice amount in euros and amount of VAT levied, based on net amount, plus a statement of total invoice amount (gross)
- Reference to any tax exempt goods or services (or applicable reduced VAT tax rates, e.g. 5 % on books (as of December 2020)
- Notice of the recipient‘s obligation to maintain a copy of the invoice for statutory periods, if applicable (e.g. section 14a UStG)
- Reference to tax exemption under small business regulation: Self-employed persons who make use of the small business regulation do not have to report sales tax. Small entrepreneurs are those whose turnover in the year of establishment does not exceed 17,500 euros. Invoices issued by small entrepreneursmust include a statement that no VAT is charged a reference to section 19 UStG. To do this, you can simply add the following sentence to the form: “In accordance with section 19 UStG, the invoice amount does not include VAT“ (in German).
While not mandatory, it is also recommended to formulate a payment term. Tell customers when the invoice amount is due payable (if no particular due date is agreed, an invoice is due payable immediately). It is, of course, necessary to specify the bank details to which payment should be made.
(Other legal requirements may exist, depending on the particular circumstances).