Invoicing best practices for Germany

Learn the best practices for setting up your invoices to ensure they meet business reporting requirements.

Invoicing
Invoicing

Stripe Invoicing is a global invoicing software platform built to save you time and get you paid faster. Create an invoice and send it to your customers in minutes—no code required.

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  1. Introduction
  2. Which circumstances require an invoice
  3. What an invoice needs to contain
  4. When an invoice needs to be issued (timeline)
  5. How long an invoice should be retained
  6. How Stripe can help

An invoice is a document that itemizes and records a transaction between a business and a customer. Invoices are frequently used in B2B payments that have high average volume order values or require custom contracts with customers. Similar to the rest of Europe, invoicing is very common in a business setting as most B2B payments are conducted by bank transfers that are almost always initiated with an invoice. Invoicing is also prevalent in consumer payments—33% of B2C transactions involve invoicing, or Kauf auf Rechnung.

Invoices broadly serve two purposes:

  1. Act as a transactional document of record, for business reporting purposes (e.g., taxes)
  2. Act as a request for a payment, detailing how much the customer owes and the payment terms

In this guide, we will cover best practices for setting up your invoices to ensure that they meet business reporting requirements. [0]

Which circumstances require an invoice

German invoicing rules apply if the supply of goods or services is taxable in Germany. [1]

For B2B invoices

Businesses based in Germany are required to issue invoices for supplying goods or services to another business. It is not mandatory to issue invoices for the supply of certain exempt services (e.g., financial and insurance transactions or educational services). [2]

Small businesses (Kleinunternehmer) are also required to issue invoices, although they are not allowed to display or charge VAT. It is a good practice to mention the reason for not charging VAT (for example, by adding the clause “Kein Ausweis von Umsatzsteuer, da Kleinunternehmer gemäß § 19 UStG”).

For B2C invoices

Although there is no general obligation to issue invoices to nonbusiness customers, German businesses must issue invoices for the sale of goods to private individuals in other EU countries if they are not using the Union One Stop Shop (OSS) scheme. The Union OSS scheme allows businesses to register in one EU member state for all intra-EU sales of goods and services to private individuals in other EU countries.

What an invoice needs to contain

Information fields

Generally, an invoice must contain the following information in order to be compliant:

  • The unique and sequential invoice number
  • The date when the invoice was issued (at minimum, the month and year)
  • The date of supply; if the invoice is issued before the supply is performed, the date of supply is when the payment is fully or partially received, provided that this payment data is known and not identical to the invoice date
  • Seller information:
    • Company name, or the full name of an individual entrepreneur
    • Address of the registered office
    • Legal entity (e.g., GmbH, AG, KG, OHG, e.K.)
    • Commercial register number (Handelsregisternummer) and registry court (Registergericht)
    • Names of executive directors (Geschäftsführer), name of the supervisory board chair (Vorsitzende des Aufsichtsrats), and share capital held by those individuals, if applicable
    • Tax number (Steuernummer) or VAT identification number (Umsatzsteuer-Identifikationsnummer) of the seller; for intra-EU B2B sales, the VAT identification number is mandatory
    • Name, address, and VAT identification number of the fiscal representative, if applicable
  • Buyer information:
    • Name and billing and delivery address of the buyer
    • VAT identification number of the customer (for intra-EU B2B sales)
  • The quantity and type of the supplied goods and services
  • The taxable amount, split according to applicable VAT rates and exemptions as well as any discounts or rebates that lower the taxable amount, unless those discounts or rebates are already accounted for in the taxable amount
  • VAT rates; if invoice line items are subject to different VAT rates, the corresponding rate must be shown on each line
  • The total VAT amount payable
  • Reasons for applying an exemption, zero VAT rate, or reverse charge:
    • Intra-Community supply exemption (steuerfreie innergemeinschaftliche Lieferung)
    • Export exemption (steuerfreier Export)
    • Reverse charge (Steuerschuldnerschaft des Leistungsempfängers)
  • When a customer issues an invoice in the name of the seller, the invoice must include the word “Gutschrift” (“self-billing invoice”).
  • An indication that a margin scheme has been applied

Simplified invoices

“Simplified invoices” (Kleinbetragsrechnung) can be issued if the total amount (including VAT) does not exceed €250. A simplified invoice must mention:

  • The full name and address of the supplier
  • The date of issue
  • The quantity and type of the supplied goods and services
  • The total invoice amount, including the taxable amount and the VAT amount
  • The VAT rate or a reason for applying an exemption

Language

There is no legal obligation to issue invoices in the German language, and customers cannot require invoices in German. However, it’s best practice to issue invoices in the language of your customer. If invoices are issued in a foreign language, the tax authorities may ask for a translation (e.g., when they perform a tax audit). Auditors generally accept invoices in English.

Currency

Invoices can be issued in any currency. It is not necessary to mention an exchange rate or an equivalent in euros. For currency conversions, the invoice issuer must use either the actual bank rate or a monthly exchange rate published by the German Federal Ministry of Finance.

Payment due date

In Germany, it is not mandatory to include a payment due date on the invoice; however, it is a good practice to do so. If no due date is shown on the invoice, the customer must pay within 30 days of the invoice issue date. Invoices do not need to mention bank account details, email addresses, or phone numbers, but it is a good practice to include those details.

Invoice format

Invoices can be issued electronically, provided that the origin authenticity, content integrity, and invoice legibility are ensured. Electronic invoicing is subject to acceptance by the recipient.

When an invoice needs to be issued (timeline)

Businesses are required to issue invoices within six months of supplying goods or services to another business. It is useful to issue invoices shortly after the supply takes place, as VAT generally becomes due at the time of the supply.

When companies supply goods or services to a business in another EU country, invoices must be issued within 15 days of the end of the month in which the supply was made.

How long an invoice should be retained

Invoices must be retained for 10 years. The obligation to retain invoices applies to both sales and purchase invoices.

Paper invoices generally must be stored in Germany. Electronic invoices must be stored electronically, and it is possible to store electronic invoices in another EU country as long as they can be accessed and downloaded in the case of a tax audit. It is necessary to obtain approval from the tax administration to store invoices in a non-EU country.

How Stripe can help

Stripe Invoicing is a global invoicing platform built to save you time and get you paid faster. Create and send a Stripe-hosted invoice in minutes from the Dashboard, or use the Invoicing API and advanced features to automate how you collect and reconcile payments.

Invoicing is integrated into the Stripe payments stack, so customers can automatically collect invoice payments with Smart Retries, email reminders, and automatic card updates, and invoice globally from day one.

Easy to get started: Create, customise, and send a Stripe-hosted invoice in minutes—all from the Dashboard, with no code required. You can also type “invoice.new” into any browser URL bar and jump straight to the invoice editor.

Gets you paid faster: Stripe’s online invoices provide an optimised experience across mobile, tablet, and desktop, and they support more than 25 languages and 135+ currencies. The hosted invoice page dynamically shows payment methods based on your customer’s location, helping you get paid faster. In fact, most Stripe invoices are paid within three days.

Configurable for any use case: Collect one-time or recurring payments via card, bank transfer, SEPA and BACS direct debit, and other payment methods. Add line items, discounts, and tax rates directly to your invoices.

Scales with you: Stripe’s APIs can help automate your invoicing workflows. Use automatic email reminders and aging reports to collect unpaid invoices, and leverage Smart Retries to retry failed payments at optimised times.

For more information on Stripe Invoicing, read our docs. To start sending invoices and accepting payments right away, reach out to our sales team.

[0] Information is current as of July 1, 2022. Consult with your legal counsel for advice specific to your business.

[1] The comprehensive list of German invoicing rules can be found in Articles 14–14c of the German VAT Act (Umsatzsteuergesetz).

[2] The full list of exempt services can be found in Article 4, points 8–29, of the German tax law.

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