Invoicing is one of the key duties of a company’s accounts team. Errors cost time, money, and trust. This is why you should make extra sure you’re compliant with the regulations when issuing your invoices. This article will tell you what information an invoice in Germany has to contain in order to be compliant. We’ll also explain special cases where exceptions apply, what audit risks to look out for, and how you can automate your invoicing.

What’s in this article?

• What information is required on an invoice in Germany?
  
• Invoicing in special cases
  
• Audit risks in invoicing
  
• Automating invoicing
  

What information is required on an invoice in Germany?

According to Section 14, Paragraph 1 of the UStG (German Value-Added Tax [VAT] Act), an invoice is any document used by a service provider to bill for goods or services. Section 14, Paragraph 4 of the UStG stipulates that compliant invoices in Germany must contain the following information:

• Full name and address of seller
  
• Full name and address of buyer
  
• A sequential, unique invoice number
  
• Issue date of invoice
  
• Date of delivery or service (performance period), if this is not the same as the issue date
  
• The tax number issued to the seller by the tax office or the VAT identification number (VAT ID) issued by the Federal Central Tax Office
  
• The quantity and type of goods delivered or the scope and nature of service provided
  
• The price (net) and total amount (gross)
  
• The applicable tax rate and the corresponding tax amount or, in the case of a tax exemption, a reference to the tax exemption
  

E-invoice

You can issue compliant invoices in paper form, in unstructured formats like PDFs, or in a standardized electronic format. Electronic invoices contain the same information as their physical counterparts, meaning that e-invoices are required to contain the same mandatory information required by Section 14 of the UStG.

As of January 1, 2025, B2B companies in Germany are subject to mandatory electronic invoicing. They are now required to be capable of issuing, receiving, and processing electronic invoices. This requirement does not apply in full to small-scale entrepreneurs, which can continue issuing invoices in other formats, but must be capable of receiving and processing e-invoices. Common electronic invoice formats in Germany include ZUGFeRD and XRechnung.

According to Section 14, Paragraph 3 of the UStG, you must be able to guarantee at all times that an invoice is readable, and also the authenticity of its origin and integrity of its content. You can make sure you’re able to prove this integrity and authenticity through features like internal control mechanisms. Article 2 of European Commission Recommendation 94/820/EC requires electronic invoices to contain a qualified electronic signature or to use electronic data interchange (EDI).

Invoicing in special cases

There are clear rules in Germany when it comes to mandatory invoice details. However, there are also a few exceptions where different rules or additional requirements apply. Below you will find an overview of the most important ones.

Low-value invoices

Invoices for a total of no more than €250 fall under simplified requirements according to Section 33 of the UStDV (German VAT Act Implementation Regulation). The mandatory information on these low-value invoices is limited to:

• Full name and address of seller
  
• Issue date of invoice
  
• The quantity and type of goods delivered or the scope and nature of the services rendered
  
• Net amount
  
• The applicable tax rate and the corresponding tax amount or, in the case of a tax exemption, a reference to the tax exemption
  
• Gross amount
  

Invoices issued by small-scale entrepreneurs

According to Section 19 of the UStG, persons claiming small-scale entrepreneur status are subject to special regulations when it comes to invoicing. Small-scale entrepreneurs are not required to show VAT on their invoices. This means only a net amount is specified. Additionally, small-scale entrepreneurs must indicate clearly on their invoices that they are applying Section 19 of the UStG, using wording along the lines of “No VAT is charged in accordance with Section 19 of the UStG.” The remaining mandatory information corresponds to the general requirements that apply to other businesses.

Advance payment invoices

Companies in Germany working on larger projects or orders can issue an advance payment invoice in order to receive prepayment for a future delivery or service. This invoice is issued before the service is rendered. It is typically used as a form of prefinancing and as a way of protecting against payment default. An advance payment invoice must contain all the mandatory information of a compliant invoice, with two key distinctions: firstly, it must be clearly marked as an “advance payment invoice”; secondly, it must stipulate the expected performance period.

Partial invoices

For large orders, there’s also the option of issuing partial invoices or progress invoices. This is where the seller receives payments while the project is still ongoing. A partial invoice is usually issued after the completion of a predefined portion of the service or the delivery of a portion of the goods. It must contain all the information required of a compliant invoice and should be clearly marked as a “partial invoice.” It also has to specify the scope of the work already completed and how much is still outstanding, so that both parties can track payment progress.

The partial sums that are still outstanding at the end of the project are then indicated on a final invoice as a final account. It’s important that this invoice takes into account all partial payments made to date.

Invoices for intracommunity B2B services

Services rendered for companies in other countries often trigger the reverse charge procedure, where the liability for tax passes to the buyer. This happens when German companies invoice a business located in another EU country, for example. In these cases the German sellers are not required to indicate VAT on their invoice. Since the place of supply is not in Germany, the supply is taxed in the destination country. However, it’s still important that the invoice contains a corresponding written note, such as “Reverse charge” or “Any tax due is the responsibility of the buyer.”

Credit note

Unlike a standard invoice, a credit note is a document issued by the buyer rather than the seller. The tax office recognizes both credit notes and invoices equally, and an invoice can be replaced with a credit note, provided both parties involved agree. A credit note must contain all the mandatory information required for an invoice. There’s just one key difference: rather than “Invoice,” the document must be marked clearly as “Credit note.”

Audit risks in invoicing

Invoicing errors can have serious implications—for both issuer and recipient.

If you issue an invoice that does not contain all the mandatory information, or that contains incorrect information, you can expect the recipient to reject it. That invoice will then have to be corrected or even re-issued, creating additional administrative effort. You can also expect a delay in payment when this happens, which can have a negative impact on your business’s cash flow, especially in cases of high invoice amounts. On top of that, there’s a risk that the tax office will not acknowledge the incorrect invoice and will demand a correction to the corresponding return, which could entail additional charges and fines. Invoicing errors can also trigger company and tax audits.

Recipients of incorrect invoices can’t claim input tax deductions. This means they can’t deduct the VAT they’ve paid from the tax they owe, which leaves them with an increased tax burden.

Typical sources of errors

Because a compliant invoice must contain all mandatory information, you should check each invoice field carefully. Some fields, however, require particular attention to detail, as they frequently lead to errors:

• Duplicate invoice numbers: Previous invoices are often reused as templates for creating a new invoice. When they are, it’s easy to forget to update the old invoice number. And the consequence of reusing an old invoice number is the same as not using one at all: the tax office won’t recognize your invoice.

• No invoice date or performance period: The date the invoice was issued and the date of service or delivery are both mandatory. If either of these dates is not indicated on an invoice, the tax office could deem it noncompliant.

• Incomplete service description: The description of the goods supplied or the services rendered must be clear and detailed. If your description is vague or imprecise, your invoice could be rejected by both the recipient and the tax office.

• Incorrect VAT calculations: VAT calculations are a common source of errors, especially if multiple tax rates or special tax exemptions have to be factored in. Applying the wrong tax rate or incorrectly calculating the gross amount and the tax due can happen all too easily.

• No VAT ID: The VAT identification numbers of both companies must be indicated on invoices for intracommunity supplies. Requesting the VAT ID from the receiving company and noting this on your invoice is therefore compulsory.

• No reverse charge note: If you’re applying the reverse charge procedure, you must indicate this explicitly on your invoice. The invoice recipient has to know that they’re the one liable for tax. It’s not enough for you to issue an invoice excluding German VAT.

• No proof of authenticity or integrity for e-invoices: Electronic invoices can be declared invalid if they do not contain evidence of their origin and the integrity of their content. You’re therefore required either to apply a qualified electronic signature or to transmit invoices using an appropriate system.

Automating invoicing

A simple typo or mathematical error can be enough to invalidate an invoice, so you should take extreme care when issuing invoices according to Section 14 of the UStG. However, you can reduce the risk of errors by automating your invoicing.

With Stripe Invoicing, you can generate and send compliant invoices containing all mandatory information in just a few clicks. Every invoice is assigned a unique invoice number that is generated sequentially. Invoicing also applies the correct tax rates based on the goods or services provided and where your customer is located—with VAT calculated automatically to reduce errors. When the system spots that the reverse charge procedure is applicable, it adds the corresponding note to the invoice.

Meanwhile, for recurring or usage-based billing, plus individually negotiated contracts, you can turn to Stripe Billing. Billing supports flexible pricing models that allow you to quickly respond to your customers' needs and integrate coupons, free trials, and discounts into your invoicing.