Invoicing in Germany (Deutschland)

This article provides an overview of invoicing requirements for freelancers and small businesses in Germany, based on official government sources.

Mandatory Invoice Fields

According to § 14 Absatz 4 of the Umsatzsteuergesetz (UStG) (Value Added Tax Act), a German invoice must contain the following information [https://www.gesetze-im-internet.de/ustg_1980/__14.html]:

The full name and complete address of the supplying entrepreneur (leistender Unternehmer) and the recipient of the service/supply (Leistungsempfänger).
The tax number (Steuernummer) issued to the supplying entrepreneur by the local tax office (Finanzamt) or their VAT Identification Number (Umsatzsteuer-Identifikationsnummer) issued by the Federal Central Tax Office (Bundeszentralamt für Steuern).
The date of issue (Ausstellungsdatum) of the invoice.
A sequential invoice number (Rechnungsnummer), which is uniquely assigned by the issuer for identification purposes.
The quantity and type (handelsübliche Bezeichnung) of the goods delivered or the scope and type of the service provided.
The time of delivery or performance of the service (Zeitpunkt der Lieferung oder sonstigen Leistung). If the invoice is for an advance payment, the time of receipt of the payment (or part thereof) must be stated, if known and different from the invoice issue date (§ 14 Absatz 5 Satz 1 UStG).
The consideration (Entgelt) for the supply or service, broken down by tax rates and individual tax exemptions, as well as any agreed-upon reduction in consideration not already included in the price.
The applicable tax rate (anzuwendender Steuersatz) and the tax amount (Steuerbetrag) calculated on the consideration, or, in the case of a tax exemption, a note indicating that the supply or service is tax-exempt (e.g., "steuerbefreit" or "Umsatzsteuerbefreiung gemäß § 19 UStG").
In specific cases (§ 14b Abs. 1 Satz 5 UStG), a note on the recipient's retention obligation (Aufbewahrungspflicht).
If the invoice is issued by the recipient or a third party on their behalf (self-billing), the term "Gutschrift" must be explicitly stated (§ 14 Absatz 2 Satz 5 UStG).

Additional details from the GoBD (Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff) (Principles for the proper keeping and retention of books, records, and documents in electronic form, as well as for data access) [https://ao.bundesfinanzministerium.de/ao/2023/Anhaenge/BMF-Schreiben-und-gleichlautende-Laendererlasse/Anhang-64/anhang-64.html] indicate that every business transaction must be supported by a document with the following contents (Rz. 77):

Unique document number (e.g., index, page number, document ID, sequential outgoing invoice number).
Document issuer and recipient (if part of industry-standard minimum recording obligations and no recording simplifications exist).
Amount or quantity/value information from which the amount to be booked results.
Currency and exchange rate for foreign currency.
Document date.
Responsible issuer, if available (e.g., cashier).

For Umsatzsteuer (VAT) purposes, further information may be required, such as specific invoice details under §§ 14, 14a UStG and § 33 UStDV (Rz. 78). Other information that may be relevant for understanding and verifying records, and thus should be retained, includes unit price, value date, due date, information on discounts/rebates, payment method, and details on tax exemption (Rz. 79).

Registration IDs

German invoices must include either the supplier's tax number (Steuernummer), issued by the local Finanzamt, or their VAT Identification Number (Umsatzsteuer-Identifikationsnummer), issued by the Bundeszentralamt für Steuern (§ 14 Absatz 4 Nr. 2 UStG [https://www.gesetze-im-internet.de/ustg_1980/__14.html]).

For businesses operating under the Kleinunternehmerregelung (small business regulation), the rules regarding the indication of VAT Identification Numbers in an invoice generally do not apply, unless they are involved in intra-Community supplies (§ 19 Absatz 1 Satz 2 UStG [https://www.gesetze-im-internet.de/ustg_1980/__19.html]). However, they must still include a note on the tax exemption.

VAT Rates

The provided sources, specifically § 14 Absatz 4 Nr. 8 UStG [https://www.gesetze-im-internet.de/ustg_1980/__14.html], require invoices to state the "applicable tax rate (anzuwendender Steuersatz) and the tax amount (Steuerbetrag)" or a note on tax exemption. However, the specific standard, reduced, or zero/exempt Umsatzsteuer (USt) rates for Germany are not detailed within the provided texts. Therefore, this article cannot list the actual rates or examples of goods/services that fall under each category.

Intra-EU Transactions

For transactions within the EU, Germany applies the reverse charge mechanism (Umkehrung der Steuerschuldnerschaft) in certain situations. If a German entrepreneur performs a domestic transaction for which the recipient (Leistungsempfänger) owes the Umsatzsteuer (USt) according to § 13b UStG, and the entrepreneur is not established in Germany (i.e., has no seat, management, permanent establishment, residence, or habitual abode in Germany), then the invoicing rules of the Member State where the entrepreneur is established apply. This rule does not apply if a self-billing agreement ("Gutschrift") has been made (§ 14 Absatz 7 UStG [https://www.gesetze-im-internet.de/ustg_1980/__14.html]).

Furthermore, if an entrepreneur participates in one of the special taxation procedures (e.g., One Stop Shop (OSS) or Import One Stop Shop (IOSS)) corresponding to Title XII Chapter 6 of Directive 2006/112/EC, the invoicing rules of the Member State where the entrepreneur declares their participation apply for the transactions declared under these special procedures (§ 14 Absatz 7 UStG).

Special Regimes: Small Business Exemption (Kleinunternehmerregelung)

Germany offers a Kleinunternehmerregelung (small business regulation) for entrepreneurs. An entrepreneur residing in Germany (or specified territories) is exempt from Umsatzsteuer (USt) if their total turnover (Gesamtumsatz):

Did not exceed 25,000 Euro in the preceding calendar year, AND
Is not expected to exceed 100,000 Euro in the current calendar year.

In such cases, the entrepreneur does not charge USt on their invoices and is not required to apply rules concerning tax exemption for intra-Community supplies, waiver of tax exemptions, or the indication of VAT Identification Numbers on invoices. They must, however, include a note on their invoices stating that the supply or service is tax-exempt, typically referencing § 19 UStG (e.g., "Gemäß § 19 UStG wird keine Umsatzsteuer berechnet") (§ 19 Absatz 1 Satz 1 & 2 UStG [https://www.gesetze-im-internet.de/ustg_1980/__19.html]).

An entrepreneur can irrevocably waive the application of the small business regulation by declaring it to the Finanzamt by the last day of February of the second calendar year following the assessment period. This waiver takes effect from the beginning of the assessment period for which it is intended and binds the entrepreneur for at least five calendar years. The waiver can be revoked with effect from the beginning of a subsequent calendar year (§ 19 Absatz 3 UStG).

Similar rules apply to entrepreneurs established in other EU Member States, with a threshold of 100,000 Euro annual turnover in the EU in the preceding and current calendar year, provided they have a valid small business identification number from their Member State of establishment (§ 19 Absatz 4 UStG).

Simplified Invoices

§ 14 Absatz 6 UStG [https://www.gesetze-im-internet.de/ustg_1980/__14.html] states that the Federal Ministry of Finance (Bundesministerium der Finanzen) can, with the consent of the Bundesrat, issue legal ordinances to simplify taxation procedures. This includes determining cases and conditions under which invoices may not need to contain certain information required by § 14 Absatz 4 UStG, or when the obligation to issue invoices with separate tax identification is waived. The GoBD also mentions the existence of "Aufzeichnungserleichterungen" (recording simplifications) (Rz. 77 [https://ao.bundesfinanzministerium.de/ao/2023/Anhaenge/BMF-Schreiben-und-gleichlautende-Laendererlasse/Anhang-64/anhang-64.html]).

However, the provided sources do not specify the exact criteria for simplified invoices or what information can be omitted. Therefore, this article cannot provide details on when simplified invoices are allowed or what specific fields can be left out.

Retention Requirements

Invoices and other relevant documents must be retained for the duration of the retention period (Dauer der Aufbewahrungsfrist). The GoBD [https://ao.bundesfinanzministerium.de/ao/2023/Anhaenge/BMF-Schreiben-und-gleichlautende-Laendererlasse/Anhang-64/anhang-64.html] outlines comprehensive requirements for the proper keeping and retention of books, records, and documents, especially in electronic form:

Orderly Storage: Documents must be kept in an orderly manner. While no specific system is prescribed (e.g., chronological, by subject, account class, invoice number, alphabetical), it must be ensured that a competent third party can inspect them within a reasonable time (Rz. 117).
Electronic Retention: Data, data sets, electronic documents, and electronic records that originated or were received electronically must be retained in their original electronic form and must not be deleted before the retention period expires. They cannot be kept exclusively in printed form and must remain unchangeable (Rz. 119). For example, emails functioning as commercial or business letters or booking vouchers must be retained electronically (Rz. 121).
Original Format: Incoming electronic documents must generally be retained in the format in which they were received (e.g., PDF or image format). Conversion to another format is permissible only if machine-readability is not restricted and no content changes occur (Rz. 131, 135).
Machine-Readability: Retained electronic documents must be available, immediately legible, and machine-readable throughout the retention period (Rz. 118). This includes enabling mathematical-technical evaluations, full-text searches, and screen queries (Rz. 126, 127). Reducing existing machine-readability (e.g., by converting formats) is generally not allowed (Rz. 129).
Scanned Paper Documents: If paper documents are received and then electronically captured (e.g., scanned or photographed), the resulting electronic document must be retained so that its reproduction visually matches the original. The process must be documented. After electronic capture, paper documents may be destroyed, unless other regulations require their retention in original form (Rz. 130, 140).
Unchangeability: Electronic bookings or records must not be altered in a way that the original content is no longer ascertainable. Changes and deletions must be logged so that both the original content and the fact of alteration remain identifiable (Rz. 58, 59, 107, 108, 111).
Procedure Documentation (Verfahrensdokumentation): A clear and comprehensive procedure documentation is required for every DV-system (data processing system) to ensure the traceability and verifiability of the entire process, from information creation to storage, retrieval, and protection against loss and falsification (Rz. 151, 152). This documentation must be kept for as long as the documents it describes need to be retained (Rz. 154).

The provided sources do not explicitly state the number of years for the retention period, but consistently refer to the "duration of the retention period."

Recent Updates or Upcoming Changes

Mandatory Electronic Invoicing (e-invoicing) for B2B Transactions:

As per § 14 Absatz 2 Satz 2 Nr. 1 UStG [https://www.gesetze-im-internet.de/ustg_1980/__14.html], for services provided to another entrepreneur for their business, the invoice must be issued as an electronic invoice if both the supplying entrepreneur and the recipient are established in Germany (or specified territories). An electronic invoice is defined as one issued, transmitted, and received in a structured electronic format that allows for electronic processing. This format must comply with the European standard for electronic invoicing (Directive 2014/55/EU) or be agreed upon by the parties, ensuring correct and complete data extraction (§ 14 Absatz 1 Satz 3 & 6 UStG).

GoBD Application:

The GoBD (BMF-Schreiben vom 28.11.2019) [https://ao.bundesfinanzministerium.de/ao/2023/Anhaenge/BMF-Schreiben-und-gleichlautende-Laendererlasse/Anhang-64/anhang-64.html] replaced the previous BMF letter from November 14, 2014, and is applicable to assessment periods beginning after December 31, 2019. Taxpayers may also apply these principles to assessment periods ending before January 1, 2020 (Rz. 183, 184).

German Invoice Requirements