There is a difference between services and goods. Goods are seen as tangible assets, which, in contrary to services, can be stored and physically shipped from one country to another e.g. books, clothes, computers, etc. Another characteristic is that the production and consumption of goods differ in time. Therefore they are treated differently when it comes to invoicing the delivery of goods to clients outside of Germany.
We wrote another tax guide on how to invoice services to customers within the EU.
If your client is based in the European Union (EU) the first thing you have to check is whether your customer is a private individual or a business
Invoicing a private person
In general the taxation takes place in the country of origin i.e. your invoice is usually with the German value-added-tax (VAT) rate.
However, if your total value of goods sold to a specific country within the respective tax year is higher than the the threshold set by the country this rule does not apply. In this case you have to register your business in the country you've exceeded the limit and charge the respective VAT rate of the country. See this list to get an overview of the threshold per country.
Invoicing a business
In case your client is a business based in the EU with a valid VAT-Identification number (VAT-ID) and bought the goods for his or her own company the cross-border delivery is in general VAT exempt and called intra-community supply.
Keep in mind that it is only VAT free if there is a documentary evidence that the goods reached their destination (e.g. proof by the chosen delivery company).
What should I write on the invoice?
In addition to the details required on a regular invoice, your invoice has to include the following details:
- Your net invoice amount and no VAT
- Your VAT-Identification number (VAT-ID)
Starting with DE and followed by numbers, if you do not have one already get yours here.
- The VAT-ID of your client
Pay attention that it is your duty to check if the number is valid, which you can find out via this website. Otherwise there is a risk that you have to cover the VAT.
- A statement that the delivery is tax exempt like "Tax free intracommunity delivery" / "Steuerfreie innergemeinschaftliche Lieferung"
The Zusammenfassende Meldung (ZM) report
The ZM quarterly report was introduced by the EU tax offices to check that VAT for transactions between EU countries is declared correctly. To declare transactions within the EU you will need your and your clients VAT-ID. Sorted automatically prepares the ZM report for you when you record your income.
Keep in mind that this article provides a general overview, but that there are several important exceptions to it.
Sorted tax guides are provided without liability and do not replace a tax advisor.
To get an accurate answer for your specific case, please consult a tax advisor.
You can always ask one of tax advisors on the Sorted platform.