Navigating VAT invoice requirements in Germany

In Germany, VAT invoices are mandatory for various transactions involving goods and services. Here are the key circumstances that require the issuance of a VAT invoice:

A VAT invoice is required when conducting a supply of goods or services that is subject to German VAT, even if the recipient is a non-taxable entity or an individual consumer.

Small businesses in Germany, known as "Kleinunternehmer," are also obligated to issue invoices for their supplies, despite being exempt from charging VAT. However, these invoices must not display or include VAT amounts.

For B2C sales of goods to private individuals in other EU countries, German businesses must issue invoices if they are not using the Union One Stop Shop (OSS) scheme.

While certain services may be exempt from VAT, businesses in Germany are still required to issue invoices when supplying these services to other businesses, with a few exceptions. Enty can help you create and manage invoices easily, ensuring compliance with the German VAT invoice requirements across various business scenarios. What’s even cooler - you don’t have to worry about VAT yourself - simply start creating an invoice, input company number and the VAT will be applied automatically.

When it comes to the contents of invoices, German VAT regulations have specific requirements to ensure clarity and compliance. Whether you're issuing a standard invoice or a simplified one for small amounts, it's essential to include elements described below.

When issuing VAT invoices in Germany, businesses have the flexibility to use any currency. It is not mandatory to mention an exchange rate or provide an equivalent amount in euros. However, it is considered best practice to issue invoices in the language of the customer for better understanding and clarity.

For invoices under €150, German VAT regulations allow the issuance of a simplified 'invoice for small amounts.' These simplified invoices require fewer details, making the invoicing process more streamlined for low-value transactions.

German VAT invoices must contain the following essential information:

VAT must be clearly displayed on invoices, showing the net amount, the VAT rate(s) applied, the VAT amount(s), and the total gross amount, including VAT.

For invoices under €150, German VAT regulations allow the issuance of a simplified 'invoice for small amounts.' These simplified invoices require fewer details, making the invoicing process more streamlined for low-value transactions.

While simplified invoices have fewer mandatory fields, they must still include the following essential details:

Small businesses in Germany, known as "Kleinunternehmer," can also benefit from simplified invoicing. While exempt from charging VAT, they must still issue invoices for their supplies. These invoices should include:

It's crucial for small businesses to reference the Section 19 VAT exemption on their invoices to clarify their VAT-exempt status. Enty, a user-friendly invoicing platform, can assist small business owners in creating and managing invoices that comply with the German VAT invoice requirements.

If VAT is mistakenly included on a small business invoice, a corrected invoice or reverse invoice can be issued to rectify the error. Correcting errors in invoices that have already been issued is a cumbersome and in some cases lengthy task, which requires a lot of effort. With Enty, it has never been easier - simply erase the information you don’t want and enter the correct data.

Timely issuance of invoices is crucial for businesses operating in Germany to maintain compliance with VAT regulations. Here are the key timelines to keep in mind:

It's important to note that while the issuance timeline is a critical aspect, businesses must also ensure that their invoices comply with all other mandatory requirements, such as including the correct information and adhering to the appropriate format.

Failure to adhere to these timelines can result in penalties and potential legal consequences. To streamline your invoicing process and ensure timely issuance, consider leveraging Enty's invoicing software, which helps you create and manage invoices with ease.

Businesses operating in Germany are required to retain invoices for an extended period to comply with VAT regulations. The current legal requirement mandates that both sales and purchase invoices must be stored for 10 years. This obligation applies to invoices in paper or electronic form, ensuring proper record-keeping and facilitating potential tax audits.

While there have been discussions about reducing the retention period for German VAT invoices from 10 years to 8 or 7 years, the current legal requirement remains unchanged. Businesses should stay updated on any future amendments to the retention period to ensure compliance.
Germany, like all EU member states, now permits the use of electronic invoices under certain conditions. This move towards digitalization aims to streamline invoicing processes and promote efficiency. This is a big step and not everyone can adopt it straightaway, but that’s where Enty comes in handy. Enty’s invoicing services can assist you in creating and managing electronic invoices while adhering to the relevant retention requirements.

It's crucial for businesses to diligently maintain and store invoices for the mandated period, as failure to do so can result in penalties and potential legal consequences. By adhering to the invoice retention requirements, companies can ensure they have the necessary documentation for tax audits and maintain compliance with German VAT regulations.

Navigating the VAT invoicing landscape in Germany requires careful attention to detail and adherence to specific regulations. Whether you're a small business owner or handling B2B transactions, understanding when and how to issue invoices correctly is crucial. Leveraging Enty's invoicing services can simplify this process, ensuring your invoices comply with German VAT standards while streamlining your business operations.