Businesses in Germany can ensure accurate bookkeeping by preparing invoices in accordance with applicable laws, though this can be challenging when special tax regulations apply.

In this article, you’ll learn what a compliant billing document is, what information it must contain, and what formal requirements you need to meet when invoicing. We’ll also explain what exceptions apply and show ways to issue different types of invoices using real-world examples and templates.

What’s in this article?

• What is a compliant invoice, and why is it important?
  
• What information does an invoice include?
  
• Formal invoicing requirements for businesses in Germany
  
• Exceptions German businesses need to consider when preparing invoices
  
• Examples and template invoices for German businesses
  
• Invoice best practices
  

What is a compliant invoice, and why is it important?

A compliant invoice is a billing record that sets out a rendered supply or performance. It must meet the statutory standards of German fiscal and commercial law, as issuers of invoices assume both commercial and legal responsibility. For businesses in the country, invoicing is a cornerstone of proper bookkeeping.

In principle, enterprises can prepare billing documents in either digital or paper form. As of January 2025, though, business-to-business (B2B) operations in Germany are required to receive and process electronic invoices. Mandatory e-invoicing will be rolled out gradually between now and 2028.

The function of invoices in business

Invoices serve several functions. They primarily request payment and provide proof of work carried out, creating transparency between the contracting parties and helping keep business procedures run smoothly.

Billing documents further play a central role in taxing revenue. For the fiscal authorities, these records serve as primary evidence for determining the nature, scope, and time of a performance. They are used to capture value-added tax (VAT), to document commercial income, and to assess input tax deductions. If an invoice does not comply with the statutory requirements, the revenue office could reject the recipient’s input tax relief or demand corrections.

Fiscal authorities regularly review invoices during corporate audits to review transactions and assess the regularity of a company’s accounts. For that reason, accurate and comprehensible invoicing makes communication with the authorities easier and reduces the risk of getting into hot water.

What information does an invoice include?

Fiscal authorities accept an invoice when it contains all mandatory details. Section 14 of the German VAT Act (UStG) specifies the required information as follows:

• Full name and address of the company supplying the goods or service
  
• Full name and address of the recipient of the product or service
  
• Issue date of the invoice
  
• Date of delivery or other supply (i.e., the performance period)
  
• Tax ID issued to the seller by the tax office or the VAT identification number (VAT ID) issued by the Federal Central Tax Office
  
• A sequential, unique invoice number
  
• Quantity and type of products supplied or the scope and type of service rendered
  
• Price (net) and total (gross)
  
• Applicable tax rate and the amount of tax due
  

Businesses that prepare invoices can also include the following optional information:

• The deadline by which the recipient must settle the invoice
  
• Details on any cash discount, including the percentage taken off and the timeframe during which the discount is valid
  
• Details on special settlement terms, such as installments or progress payments
  
• The seller’s bank details, including IBAN and bank identifier code (BIC) where applicable
  
• The commercial register entry details, including registry court and registered number
  
• Details on the seller’s management or owners
  
• The seller’s telephone number, email address, or website in case of queries
  

Formal invoicing requirements for businesses in Germany

In addition to the content requirements stipulated in Section of the 14 UStG, invoices in Germany have to meet the formal standards for sound bookkeeping.

Rules on numbering invoices

When German businesses generate invoices, they must number them sequentially. Unique document numbers help to identify each transaction explicitly. It is equally important that this numbering is systematic. Gaps in numbering generally need explanation, e.g., during a company audit.

GoBD compliance

The principles for the proper management and storage of books, records, and documents in electronic form (GoBD) are also key to the issuance and archiving of bills. These principles set out detailed rules concerning how organizations have to prepare, store, and retain tax documentation, including billing documents. The GoBD requires bookkeeping and recordkeeping systems to be comprehensible, complete, correct, up-to-date, and tamperproof. That means invoices must be as follows:

• Traceable and verifiable: Businesses in Germany need to maintain comprehensive workflow documentation, evidence every posting, and clearly document all data processing results so they remain traceable and verifiable.

• Complete and correct: All documents subject to retention requirements have to be backed up individually and with all their constituent parts. The GoBD further states that documentation must be truthful.

• Posted at the correct time: Record each transaction promptly after it occurs.

• Proper accounting: Operations in the country are also obligated to maintain clear accounts. There are specific principles of proper bookkeeping that allow third parties—such as auditors or tax advisors—to trace, review, and objectively assess transactions within a reasonable timeframe.

• Tamperproof: Make sure that no one can amend an invoice after issuance without making the change obvious, and record any deletions or modifications in a consistent change log.

Retention obligations

In Germany, bills are subject to clear regulations on retention periods. Per commercial and tax law regulations, businesses have to, in principle, retain incoming and outgoing billing documents for eight years. The retention timeframe begins at the end of the calendar year that the invoice was issued or received.

Additionally:

• Digitally received billing documents must be archived in their original electronic format
  
• Subject to certain conditions, organizations can digitize paper documents and subsequently destroy them, as long as they document the steps in line with the GoBD
  
• The documents need to remain legible and machine-readable for the entire retention timeframe
  

Exceptions German businesses need to consider when preparing invoices

There are certain exceptions that businesses in Germany need to be aware of when preparing invoices. Separate invoicing rules apply in the following cases:

Small-scale entrepreneurs

Small-scale entrepreneurs qualify for a VAT exemption if their revenue did not exceed €25,000 in the previous calendar year and they do not expect it to exceed €100,000 in the current calendar year. These traders are therefore not obliged to indicate VAT on their invoices. They need to state net amounts and add a note regarding this exemption, for instance: “No VAT due in accordance with Section 19 UStG.” This note promotes transparency for the counterparty and prevents misunderstandings around taxation.

Recurring invoices

Businesses in Germany use recurring invoices to charge their customers the same amount at regular intervals, such as for subscriptions, membership dues, or other ongoing obligations. To meet tax office standards, assign each document a unique, sequential invoice number and properly indicate the corresponding performance period. Issuers need to clearly state the payment terms, including due dates and any installments or cash discounts. These requirements create transparency and verify accurate processing for all parties involved.

Reverse charge invoices

The reverse charge procedure shifts liability for amounts due on certain supplies from the seller to the customer. The seller generates an invoice exclusive of VAT and adds a note such as “Reverse charge applied” or “Any tax due is the responsibility of the recipient.” The buyer calculates and remits the VAT themselves.

This process frequently applies to cross-border B2B transactions when the place of supply is the customer’s country. The UStG further defines certain exceptions in which the tax liability shifts to the buyer. Billing documents sent to European Union businesses must also indicate both parties’ VAT numbers.

Generally speaking, the reverse charge procedure applies to B2B transactions within the EU. However, it likewise applies, in many cases, when German enterprises generate invoices to other activities in third countries. That said, there are no unified rules here, so businesses need to review the specific national standards in the destination nation.

Invoices issued to private individuals within and outside the EU

Invoices issued to private individuals follow different rules from B2B records. For goods delivered within the EU, VAT is usually due in the seller’s location, so local businesses must indicate German VAT on their billing documents, including when customers reside in another EU country. Supply of services, especially digital offerings, follows a different approach: Section 3a of the UStG determines tax on services in many cases based on the recipient’s location, meaning issuers need to apply VAT in the relevant EU member state.

For invoices to private individuals in third countries, deliveries of goods are generally treated as export supplies and are exempt from VAT per Section 4(1a) of the UStG. In this case, billing documents must contain a reference to this exemption, e.g., “Tax-exempt export supply under Section 4(1a) UStG.” Offerings provided to private individuals outside the EU are also frequently tax-exempt, given the place of delivery per Section 3a of the UStG is in a third country. Again, it’s a good idea to include a corresponding note on the bill.

Credit notes

A credit note can be understood as a “reverse invoice,” since the buyer sends it but fulfills the same purpose as a billing document. As long as it contains all the mandatory details, a credit note can replace an invoice and will be accepted as such by the tax office. Still, buyers could issue these notes exclusively with the other party’s prior agreement. Sellers are not obliged to accept credit notes they have not agreed to. Companies often generate credit notes for items including bonus payments or commissions.

Examples and template invoices for German businesses

The information requirements under Section 14 of the UStG listed above form the standard basis for issuing VAT invoices. Below are two templates for specific exceptions:

Template invoice for a small-scale entrepreneur

Let’s say a graphic designer runs a small business that generated turnover of €18,500 the previous year and expects to bring in €32,000 in the current year. This graphic designer qualifies as a small-scale entrepreneur under Section 19 of the UStG. She prepares an invoice for a marketing agency for designing a product catalog. The agreed fee is €1,200. Since she is a small-scale entrepreneur, she adds no VAT and lists a net amount.

Template reverse charge invoice

Let’s say a German IT service company provides consulting work to a Dutch firm for an agreed fee of €3,500. Since this is an intracommunity B2B transaction, the reverse charge procedure applies. The tax liability shifts to the buyer, so the local business does not indicate any VAT. When issuing the invoice, the German operation must make sure to add a note regarding the reverse charge. It further needs to state the VAT numbers of all parties involved.

Invoice best practices

Professional invoicing is fundamental to sound bookkeeping and is likewise key for German businesses in terms of liquidity and efficient accounts receivable management. To avoid late payments or landing in hot water with the fiscal authorities, it’s a good idea to establish a well-structured workflow.

Recording the performance

The first step is to document each transaction in detail. That includes recording the type and scope of the supply, as well as the performance period. Thorough documentation is central to transparent billing and makes subsequent internal or external audits easier.

Preparing an invoice

Businesses can prepare invoices manually or automate the workflow with software. Digital tools such as Stripe Invoicing help you establish efficient and compliant workflows and manage recurring billing documents with ease. You can personalize payment terms and embed payment links to make the settlement process much more straightforward for your customers. Stripe automatically tracks the invoice status, sends payment reminders, and processes refunds.

Documenting and archiving

Archive every bill after sending it and ensure it remains traceable. Create a structured filing system that encompasses digital and paper-based invoices. Electronic invoices need to be saved in their original format to meet the GoBD standards.

The documentation procedure itself must also be transparent and comprehensible so that each invoice can be easily identified and reviewed during internal or company audits. Invoicing helps you by automatically recording and archiving billing documents, and logging the status of each record. In turn, this provides you with an overview of open, unpaid, or overdue receivables at any time, guaranteeing audit-proof archiving.