If you carry out a business activity in accordance with Section 2 of the German Value Added Tax Act (UStG), you are entitled to issue invoices. There is an obligation to issue invoices if, among other things, you provide a taxable service to another entrepreneur for their company. In this case, you must issue an invoice within 6 months of providing the service.
Necessary invoice details:
The Value Added Tax Act stipulates that an invoice must contain certain information (Sections 14, 14a UStG). In particular, the following are required
- the full name and address of the supplier and the recipient of the service
- the tax number or VAT identification number issued to the supplier,
- the date of issue,
- a consecutive invoice number,
- the quantity and type (standard commercial description) of the goods supplied or the scope and type of the other service provided
- the consideration,
- the applicable tax rate and
- the amount of tax due on the payment. In the case of a tax exemption, a note is required stating that a tax exemption applies to the delivery or other service
Small-value invoices
For reasons of simplification, an invoice with a total gross amount of up to €250 (so-called small-value invoice, Section 33 UStDV) does not need to contain all of the information specified in Section 14 (4) UStG. Sufficient are
- the full name and address of the supplier,
- the date of issue
- the quantity and type (standard commercial description) of the goods supplied or the scope and type of the other service,
- the summary of the consideration and the tax amount in one sum (gross amount),
- the applicable tax rate or, in the case of a tax exemption, a reference to the fact that a tax exemption applies to the delivery or other service.
Note
Special features when applying the small business regulation
Even if you make use of the small business regulation (Section 19 UStG), you can still issue invoices to your customers. However, you may not show VAT separately on these invoices. In the case of invoices for small amounts in accordance with Section 33 UStDV, the tax rate is deemed to be a separate tax statement. If you do not observe this and still show the VAT separately in invoices or state the tax rate in low-value invoices, you will generally owe the tax shown. Your invoice recipients cannot deduct the tax amounts shown as input tax.
Introduction of the mandatory electronic invoice from 2025 (e-invoice)
With effect from January 1, 2025, the VAT Act was amended and the mandatory electronic invoice (so-called e-invoice) was introduced.
An e-invoice is an electronic invoice that is created, transmitted and received in a specified structured data format in accordance with the European EN 16931 series of standards. Examples of such formats are the standard XRechnung and invoices in the ZUGFeRD format.
The obligation to issue an e-invoice is preceded by gradual transitional regulations. Only from January 1, 2028 will the issuing of e-invoices be mandatory for all domestic entrepreneurs. Paper and PDF invoices are therefore still permitted for the time being.
Exemptions from the obligation to issue an e-invoice include sales to private end consumers, small-value invoices, certain tax-free sales (e.g. tax-free property rentals) and invoices from small businesses. In these cases, paper and PDF invoices can continue to be issued beyond January 1, 2028.
Further information on e-invoicing can be found here.