When you are making use of the small business regulation you do "not charge" value-added tax (VAT), yet your invoices must comply with the basic structure of an invoice.
What should I write on the invoice?
As a small business you are not allowed to charge VAT, but you are obliged to state the reason for not charging VAT.
In addition to the details required on a normal invoice, your invoice has to include the following details:
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Your invoice amount and no VAT
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A statement that you're making use of the small business regulation like "According to § 19 UStG no VAT is charged" / „Gemäß § 19 UStG wird keine Umsatzsteuer berechnet“.
What about invoicing clients outside of Germany as a small business?
As a small business owner you are usually subject to the same tax rules as an ordinary business when participating in international business. You cannot claim simplifications or other privileges. Anyone who buys or sells goods and services abroad must comply with the provisions of international VAT law.
European Union (EU)
Services
If your client is a business located in the EU, both of you will need a valid VAT-Identification Number (VAT-ID). For this case please take a closer look at our tax guide on how to invoice services to a business within the EU.
For the periods in which you sold your services to other EU businesses, a quarterly VAT pre-registration must be submitted (Umsatzsteuer-Voranmeldung).
However, you do not have to hand in an additional quarterly report (in German Zusammenfassende Meldung), which you normally have to hand in when selling to other EU member states.
Notice that if your client is a private individual your invoice is as usual without VAT and states a reference to §19 UStG.
Goods
For small businesses, it is recommended to not state their VAT-ID. They are also not obliged to check the VAT-ID of their clients. This means you can issue your invoice as usual – without VAT, but with the note that you are making use of the small business regulation. In this case, you also do not have to submit any advance VAT returns.
This is contrary to the requirements for the provision of cross-border services mentioned above where both parties must have a valid VAT-ID – even as small businesses!
Outside Germany and the EU
Services
Take a look at our tax guide on invoicing services to customers outside Germany and the EU.
Goods
Take a look at our tax guide on invoicing delivery of goods to customers outside Germany and the EU.
Sorted and Deel's 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.
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