Section 4: Tax and input VAT

§ 14 Issue of invoices

(1) An invoice is any document with which a supply of goods or services is settled, irrespective of how this document is named in commercial practice. An invoice may be sent as an electronic invoice or, subject to paragraph 2, as other invoice. An electronic invoice is an invoice, which is issued, transmitted and received in a structured electronic format and enables electronic processing. Another invoice is an invoice that is transmitted in another electronic format or on paper. The transmission of an electronic invoice or other invoice in an electronic format requires the consent of the recipient, unless there is an obligation under paragraph 2 sentence 2 number 1. The structured electronic format of an electronic invoice

1. must comply with the European standard for electronic invoicing and the list of corresponding syntaxes in accordance with Directive 2014/55/EU of the European Parliament and of the Council of 16 April 2014 on electronic invoicing in public procurement (OJ L 133, 6.5.2014, p.1) or

2. may be agreed between the invoice issuer and the invoice recipient. The precondition is that the format enables the correct and complete extraction of the information required under this Act from the electronic invoice into format that corresponds to the standard under number 1 or is interoperable with it.

(2) If a taxable person carries out a supply of goods or services in accordance with § 1 paragraph 1 number 1 he shall be entitled to issue an invoice. In the following cases he shall be obliged to issue an invoice within six months following the date the supply was carried out, if the transaction is not VAT exempt in accordance with § 4 number 8 to 29:

1. for a supply carried out to another taxable person for the business of the latter; the invoice shall be issued as an electronic invoice pursuant to paragraph 1 sentence 3 and 6 if the supplier and the recipient are resident in Germany or in one of the territories specified in § 1 paragraph 3;

2. for a supply to a legal person who is not a taxable person;

3. for a taxable work delivery (§ 3 paragraph 4 sentence 1) or for a supply of service in connection with immovable property to a recipient other than those specified in number 1 or 2.

As taxable person resident in Germany or in one of the territories specified in § 1 paragraph 3 is regarded a taxable person who has his registered office, his place of management, a fixed establishment involved in the transaction or, in absence of a registered office, his domicile or habitual residence in one of these territories. § 14a remains unaffected. Notwithstanding the obligations under sentence 2, an invoice for the supply of goods or services may be issued by a recipient referred to in sentence 2 number 1 or 2, provided this was agreed to in advance (self billing invoice). A self billing invoice shall no longer be valid as an invoice where the addressee of the self billing invoice objects to the document submitted to him. An invoice may be issued by a third party in the name and for the account of the taxable person or of one of the recipients referred to in sentence 2 number 1 or 2.

(3) The authenticity of the origin of the invoice, the integrity of its content and its readability must be guaranteed. Authenticity of origin means the security of the identity of the issuer of the invoice. Integrity of content means that the information required, based on this Act, has not changed. Every taxable person is responsible for ensuring the authenticity of the origin, the integrity of the content and the readability of the invoices. This can be achieved by any internal control mechanisms, which can provide a reliable audit trail between invoices and goods or services supplied. Without prejudice to other procedures, the authenticity of the origin and the integrity of the content are guaranteed in an electronic invoice by means of

1. a qualified electronic signature, or

2. the electronic interchange of data (EDI), in accordance with Article 2 of the Commission Recommendation 94/820/EC of 19 October 1994 relating to the legal aspects of electronic data interchange (OJ L 338,28 December 1994, p. 98), if an application method for the data interchange is stipulated in the agreement, which guarantees the authenticity of the origin and the completeness of the data.

(4) An invoice must contain the following information:

1. the full name and address of the supplying taxable person and of the recipient;

2. the tax number issued by the tax authority to the supplying taxable person or the VAT identification number issued to him by the Federal Central Tax Office;

3. the date of issue;

4. a consecutive number with one or several unique sequences of numbers allocated by the issuer of the invoice for the purposes of identifying the invoice (invoice number);

5. the quantity and type (standard commercial description) of the supplied goods or the amount and type of provided services;

6. the date of the supply of goods or services; in the cases referred to in paragraph 5 sentence 1, the date on which the consideration or a part of the consideration was received, provided that the date of receipt is known and is not identical to the issue date of the invoice;

7. the consideration for the supply of goods or services broken down by VAT rates and individual VAT exemptions (§ 10), as well as any reductions of the consideration agreed upon in advance, if such have not already been included in the consideration;

8. the applicable VAT rate and the amount of VAT attributable to the consideration or, in the case of a VAT exemption, a reference indicating that the supply of goods or services is VAT exempt, and

9. in the cases referred to in § 14b paragraph 1 sentence 5, a reference to the recipient’s obligation to retain records, and

10. in cases where the invoice is issued by the recipient or by a third party engaged by him according to paragraph 2 sentence 4, the statement “self billing invoice”.

In the cases referred to in § 10 paragraph 5, numbers 7 and 8 are to be applied under the condition that the taxable amount for the supply (§ 10 paragraph 4) and the VAT amount attributable to it are specified. However, a taxable person who applies § 24 paragraph 1 to 3 is entitled, in such cases, to only state the consideration and the VAT attributable to it. The correction of an invoice by amending missing or incorrect statements is not regarded as an event with retrospective effect within the meaning of § 175 paragraph 1 sentence 1 number 2 and § 233a paragraph 2a of the Fiscal Code.

(5) Paragraphs 1 to 4 shall apply accordingly in the event that the taxable person receives the consideration or a partial amount thereof for a supply of goods or services that has yet to be carried out. If a final invoice is issued, the partial amount of the consideration received prior to the supply of the goods or services being made and the amount of VAT attributable to it are to be deducted if invoices within the meaning of paragraphs 1 to 4 have been issued with regard to the partial amount of consideration.

(6) For the purposes of simplifying the taxation procedures, the Federal Ministry of Finance, with the consent of the Federal Council, may issue a directive stipulating in which cases and under what conditions

1. documents may be acknowledged as invoices;

2. the information required under paragraph 4 may be included in several documents;

3. invoices need not include certain information as stipulated in paragraph 4;

4. the obligation of the taxable person to issue invoices on which VAT is shown separately (paragraph 4) ceases to apply, or

5. invoices can be corrected.

For the purposes of simplifying the taxation procedures, the Federal Ministry of Finance, with the consent of the Federal Council, may issue a directive stipulating more detailed provisions on the design of the structured electronic format of an electronic invoice.

(7) In cases where a taxable person carries out a transaction within Germany, for which the recipient is liable for VAT according to § 13b, and the taxable person does not have his registered office, place of management or a fixed establishment, from where the transaction is carried out or which is involved in the provision of the transaction, within Germany or in the absence of his registered office is not resident nor usually resides in Germany then, by way of derogation of paragraphs 1 to 6, the regulations of the Member State in which the taxable person has his registered office, place of management or a fixed establishment from where the transaction is carried out, or in the absence of a registered office, the Member State in which he is resident or usually resides, shall be applicable with regard to the issue of the invoice. Sentence 1 shall not apply if self billing invoicing has been agreed according to paragraph 2 sentence 2. If the taxable person participates, in another Member State, in one of the particular taxation procedures according to Title XII Chapter 6 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ L 347 of 11.12.2006, page 1) in the respectively valid version, by way of derogation of paragraphs 1 to 6, the provisions of the Member State in which the taxable person indicates his participation shall be applicable with regard to the issue of invoices for the transactions to be declared in the particular taxation procedures.