Founders and entrepreneurs need to know the legal issues when writing an invoice. First and foremost, there is the tax office, which is mainly concerned with sales tax and profit taxation. In the next sections we will thus take a look at the following aspects:
According to § 14 of the German Value Added Tax Act (UStG), an invoice must contain 12 mandatory items of information:
Other helpful details include:
A nice design of the invoice with CI and corporate colors of the company is useful. Because the invoice design is also part of the marketing or branding.
The GOBD are the principles for the proper keeping and storage of books, records and documents in electronic form as well as for data access. When writing an invoice, the entrepreneur is affected in several respects.
The background of the GOBD is the concern of the tax authorities that companies do not declare sales completely, but make them „black“. If invoices are manipulated or deleted, the state misses out on revenue from sales tax and income tax.
These rules are a consequence of the GOBD. If an invoice is cancelled after it has been issued, this invoice must be kept with the note „Cancellation“. You should always be able to justify the cancellation, especially if the auditor asks for it. The new invoice should have a reference number to the cancelled invoice.
Invoices, including electronically stored invoices, must be kept by an entrepreneur for 10 years and must be able to be presented without gaps in the event of a tax audit.
In principle, you can issue invoices up to 3 years after the service has been provided. The decisive factor is that the claim to the invoice is justified. We generally recommend issuing invoices immediately after the services have been rendered. The right to payment also becomes time-barred after 3 years if the entrepreneur forgets to send a reminder for an open invoice. Thus, we also recommend writing a payment reminder or a reminder letter in good time.
You may create and send any type of invoice in an electronic format. In the narrower sense, electronic invoices are machine-readable. This means that an electronic invoice contains a code that can be read by software. Electronic invoices no longer require a digital signature.
This case is especially important for part-time self-employed persons. Those who choose the small business regulation do not pay sales tax and are not allowed to show sales tax on their invoices.
Otherwise, all the mandatory information that we explained above with our infographic applies.
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