German Invoice Requirements

Overview

Germany maintains strict invoicing requirements that align with EU VAT directives while addressing specific national needs. Proper invoicing is crucial for VAT compliance, proper tax deduction, and avoiding penalties from German tax authorities.

Legal Framework

German invoice requirements are primarily governed by the German VAT Act (Umsatzsteuergesetz, UStG) and EU regulations. The Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt) oversees implementation, with additional details specified in the VAT Implementing Regulation (Umsatzsteuer-Durchführungsverordnung, UStDV).

Essential Elements of a VAT Invoice

According to Section 14 of the German VAT Act, a VAT-compliant invoice must include:

• Supplier and recipient information: Full names and addresses
• Tax information: VAT identification number or tax number of the supplier
• Invoice date: Date of issue (Section 14 Para. 4 No. 1 UStG)
• Unique invoice number: Sequential and non-repetitive (Section 14 Para. 4 No. 4 UStG)
• Date of supply: When the service was provided or goods delivered (Section 14 Para. 4 No. 6 UStG)
• Description of goods/services: Clear explanation of what was provided (Section 14 Para. 4 No. 5 UStG)
• Net amount: Price excluding VAT for each item
• VAT rate and amount: Applicable percentage and calculated VAT (Section 14 Para. 4 No. 8 UStG)
• Total amount: Gross amount including VAT (Section 14 Para. 4 No. 9 UStG)
• VAT exemptions: Reference to any VAT exemptions if applicable (Section 14 Para. 4 No. 12 UStG)

Special Cases in German Invoicing

Intra-Community Supplies

• Legal Reference: Section 14a Para. 1 UStG
• Requirements: Must include VAT identification numbers of both supplier and recipient and a statement indicating the supply is VAT-exempt as an intra-community supply ("steuerfreie innergemeinschaftliche Lieferung")

Reverse Charge Mechanism

• Legal Reference: Section 14a Para. 2 UStG
• Requirements: Must include the statement "Steuerschuldnerschaft des Leistungsempfängers" indicating the recipient is liable for VAT

Small Invoices (Less than €250)

• Legal Reference: Section 33 UStDV
• Simplified Requirements:
  • Name and address of supplier
  • Date of issue
  • Description of goods/services
  • Gross amount including VAT and applicable VAT rate

Other Special Cases

• Travel Services: Special margin scheme requirements (Section 25 UStG)
• Self-Billing: Must include note that invoice was issued by recipient (Section 14 Para. 2 No. 2 UStG)
• Electronic Invoices: Must ensure authenticity, integrity, and legibility (Section 14 Para. 1 UStG)
• Advance Payments: Must include date of payment and amount (Section 14 Para. 5 UStG)

Invoice Formatting Requirements

• Chronological numbering: Invoices must be numbered sequentially
• Currency: Must specify euro (€) as the currency
• VAT breakdown: Clear separation of net amount, VAT amount, and gross amount
• Language: Generally required in German, though bilingual invoices are acceptable
• Corrections: Must follow specific guidelines for corrected invoices

E-Invoicing Requirements

Germany is implementing mandatory electronic invoicing in phases:

Timeline

• January 2025: All businesses must be able to receive e-invoices
• January 2027: Businesses with turnover exceeding €800,000 must issue e-invoices
• January 2028: All businesses must issue and receive e-invoices for domestic B2B transactions

Technical Standards

• XRechnung: XML-based format compliant with EN 16931 standard
• ZUGFeRD: Hybrid format combining PDF/A-3 with embedded XML
• Peppol BIS: Cross-border transmission protocol

Process Requirements

• B2B: Direct exchange between businesses via email, EDI, or Peppol network
• B2G: Must use central portals like E-Rechnungsportal Bund or OZG-RE
• Archival: Must store e-invoices in original format for 10 years ensuring authenticity and integrity

Penalties for Non-Compliance

• Loss of input tax deduction: Recipients cannot deduct input VAT
• Penalties and interest: Financial consequences for incorrect or incomplete invoices
• Audit risks: Increased likelihood of tax authority audits

Practical Compliance Tips

• Invoice templates: Use standardized templates ensuring compliance
• Staff training: Regular training on current VAT regulations
• Automated systems: Implement tools that automatically include required details
• Professional consultation: Engage tax professionals for ongoing compliance

Digital Solutions for German Invoicing

Modern tools can help businesses comply with German invoicing requirements:

• Use compliant invoice templates
• Support for e-invoicing formats
• Format conversion and compliance checking

Sources and Resources

• German VAT Act (Umsatzsteuergesetz)
• Federal Central Tax Office (BZSt)
• E-Rechnungsportal Bund
• German Tax Consultant's Guide

For businesses dealing with regular invoicing in Germany, consulting with a German tax professional or using compliant tools can help ensure compliance with these requirements while saving time and reducing errors.