In principle, entrepreneurs are obliged to issue invoices for the supplies they make or other services they provide.
The VAT Act stipulates what information an invoice must contain. If the information is incorrect, the receiving entrepreneur is denied the right to a refund of VAT.
In principle, the full name and address of the supplying trader and the recipient of the service must be stated. The indication of the post office box or the major customer address is also sufficient in individual cases.
In addition, the supplying entrepreneur must indicate his tax number or, optionally, the VAT identification number on the invoice. A consecutive invoice number is also a prerequisite. Accordingly, each invoice exists only once and subsequent invoicing or the fact that invoices are not declared is immediately apparent. The consecutive invoice number can consist of one or more numbers as well as series of letters or a combination thereof. Number ranges can also be defined for temporally, geographically or organizationally delimited areas, e.g. for periods of time (months, weeks, days), different branches, operating sites, etc.
In addition, the time of delivery or other service must be specified. This is also required for advance payments, provided that the time of receipt of the consideration is fixed and not identical with the invoice date.
The remuneration must be broken down separately according to tax rates and amounts or any individual tax exemptions. Any reduction of the remuneration agreed in advance, i.e. rebates or discounts, must be indicated unless the reduction is already taken into account in the remuneration.
Invoices for down payments and final invoices
It is not necessary to indicate the time of delivery/service if the time of delivery or service is not fixed, e.g. in the case of an invoice for advance payments or down payments.
However, it must be evident from the invoice that a service not yet rendered is being invoiced.
VAT must also be shown on down-payment invoices so that the recipient can claim input tax. In the final invoice, the down payment received during the performance of the service and the tax amounts due on it must then be deducted.
A selection of special cases
Settlement by credit note
A credit note is an “invoice” issued by the recipient of the service (e.g. customer, client). The word “credit note” must appear on the invoice. So that this is not confused with refunds, cancellations or discounts, a designation other than “credit note” should be used. Tax-free amounts can also be settled within the framework of a credit note. The tax number or VAT identification number of the supplying trader and not that of the trader issuing the credit note must also be shown in the case of a credit note.
In the case of intra-Community supplies, in addition to the VAT identification number of the supplier, the VAT identification number of the recipient of the supply must also be indicated. Reference must be made to the transfer of liability for tax.
Invoicing for construction work
For construction services, the reverse charge is applicable. This means that the recipient of the service becomes the debtor for VAT. This is the case if the recipient of the service is himself an entrepreneur and provides or has provided construction services on a sustained basis.
If the recipient of the service presents a valid exemption certificate, this is an indication that the service provided to him is used for a construction service and that the reverse charge applies. A reverse charge is also to be assumed if the recipient of the service submits the so-called “USt 1 TG” certificate, from which the sustainable activity in the area of the construction services of the entrepreneur results.
If the liability for tax is shifted to the recipient of the service, the entrepreneur providing the service may only invoice the net amount without VAT. The note “Tax liability of the service recipient” must be visible on the invoice. Special regulations must be observed for the recording of such turnover in the advance VAT return and annual return.
Under VAT law, small-value invoices are invoices that do not exceed a total amount of EUR 250. Simplification rules apply, such as the fact that a sequential number is not required. However, the full name and address of the supplier, the date of issue, the quantity and nature of the goods supplied or the scope and nature of the other service and the remuneration and the amount of tax payable on it must be stated in one sum as well as the applicable tax rate.
In principle, invoices can be issued both electronically and in paper form. However, it is necessary that the recipient agrees to electronic invoice invoicing. This consent must be explicit, which is also given by payment of the invoice. In addition, the invoice recipient must be able to electronically archive the invoices received electronically.
Printing out an electronic document and then deleting the digital document violates the retention obligations. According to the tax authorities, this would merely be a copy of the electronic invoice, which is not the same as the original of a paper invoice.