Invoicing in Germany
Invoices are important documents that serve as a record of a transaction between buyer and seller. They are usually issued by a business to their clients and show a clear account of the billing for a particular transaction. Invoices are important for a number of reasons and may have a particular format that needs to be adhered to. As the tax laws in Germany are quite rigid, the invoice requirements should be adhered to strictly to ensure complete compliance with regulation. Here we will outline all important information for invoices that are issued in Germany.
E-invoicing in Germany
Over the past decade Germany has been on a process of reforming invoicing through the implementation of standards for e-invoicing. From 2010 when the European Union (EU) issued a directive that member states should attribute the same weight to e-invoices as they do paper invoices.
As of November 2020, in cases of B2G, e-invoices must be submitted to all federal authorities and in some states, e-invoicing may become mandatory. While for the time being it is not mandatory for B2B transactions, it may soon be extended beyond the scope of B2G.
Requirements for an invoice in Germany
In order to adhere to the correct format an invoice must contain the following information:
- Date of issue
- VAT number of the supplier
- Sequential number
- Full name and address of the supplier
- Date of the goods
- Description of the goods supplied or service provided
- Name of the buyer
- Value of the amount due excluding tax
- Details to support zero VAT (if applicable)
- The amount of VAT and the VAT rate applied
- The total amount due including VAT
*Note: these are the requirements for a standard invoice, however the requirements may vary based on the size of the transaction or the particular industry an enterprise is in.
Benefits of Externalized Client invoicing
In international transactions many companies are opting to externalize their invoicing processes as it has some benefits such as:
- Reduction in costs: having internal staff could potentially end up being costly, especially if the correct format has not been followed.
- Decreased risk: we will ensure the invoice follows the prescribed format and is in line with local regulation.
- Expertise: our consultants stay up to date with all regulations and laws that may be subject to change.
- Record of transaction: with prescribed procedures, we have developed an extensive and well-organized system that allows you to easily keep track of all transactions made.
- Efficient process: if a company makes a payment directly it may be a longer process than anticipated.
INS Global in Germany
Carrying out transactions across borders may lead to unexpected challenges arising, especially regarding the changing landscape of invoicing. It is important to ensure your company always remains in compliance with local regulations. At INS Global our HR experts are able to help your business with a range of different activities such as PEO, which lets you hire staff in Germany without setting a separate entity, recruitment, payroll and tax administration, and many more. Let INS Global simplify doing business for your enterprise in Germany.