In most cases, as a freelancer, you have to write invoices to receive your fee. This can be intimidating at first, but it's not that difficult. Here you can find out what information you need to include on the invoice in Germany and what else you should think about.
Writing an invoice: What has to be included?
According to § 14 of the German Value Added Tax Act (Umsatzsteuergesetz, UStG), there is mandatory information on the invoice that you cannot do without. In addition, there are other details that you should include in your own interest. Let's take a look at the two categories:
Legally required information
The absolute basics include the name and address of yourself and the customer, as well as the date and invoice number. The invoice number may only be assigned once and must be a consecutive number. The exact structure is up to you, as long as it is comprehensible. You can also add letters.
Either your tax number or your sales tax identification number must also be on the invoice. It is best to include both by default if you have a VAT ID.
You can't just put a lump sum on the invoice, you have to break down your services by type and volume. In many cases, you probably bill by hours or days. In this case, the invoice will show the number of days and the unit price per day, for example. Of course, you can also charge fixed prices for services, for example for a text or a logo design. In this case, you note the type of service, the number and the unit price.
The time of the service must also be included on the invoice. However, detailed time recording is not necessary. If you write monthly invoices, it is sufficient, for example, if the respective month is mentioned as the period of performance.
The sales tax rate for each service is also part of the invoice. It is usually 19%, but in some cases the reduced tax rate of 7% applies, for example for artistic services. Depending on your portfolio of services, different VAT rates may appear on an invoice. If you are exempt from VAT as a small business owner, a note to this effect will appear on the invoice instead.
Finally, the mandatory information on the invoice includes the total amount for all services (i.e. your net fee), the total VAT and the gross invoice amount, which is made up of your net fee and the tax. If you have agreed on discounts with the client (for example, a rebate), these must also appear on the invoice.
It is not obligatory, but it goes without saying that you should include your bank account details on the invoice. This makes it easier for the customer to pay - and that is in your interest.
You can also put the payment term on the invoice. The legal payment term is 30 days, unless otherwise agreed and specified. The best thing to do is to check whether the contract with the customer contains a payment term. If so, include it in your invoice. If there is no agreement, and you want to set a shorter term, it is better to discuss this briefly with the client. Otherwise, you might upset them with a short deadline. Besides, the shorter deadline is only binding for them if they have agreed to it.
An invoice is of course a very functional document. Nevertheless, it is a nice gesture if you thank your client for the order and the cooperation. One sentence at the end is enough for this. You can also preface your services with a salutation and an introductory line, for example, "Dear Ms. XY, for my services in August 2021, I take the liberty of invoicing:"
Of course, if you have your own logo, that also looks good on the invoice and creates a more professional impression.
Invoicing as a Kleinunternehmer: special features
For many freelancers, revenue is not as high in the beginning because they have to establish themselves first. In case if you are only self-employed on the side, your income will naturally be lower than that of a full-time freelancer. You can apply to the tax office for the so-called Kleinunternehmerregelung (small business regulation) if you achieved a maximum turnover of 22,000 euros in the previous year and are expected to achieve a maximum of 50,000 euros in the current year. If you are a new freelancer, you can estimate your turnover.
The small business regulation ensures that you do not have to charge sales tax. Your fee is therefore also the gross invoice amount. However, you cannot simply omit the sales tax, but must include a note to this effect in the invoice. There is no binding wording for this, but you should refer to the underlying § 19 Umsatzsteuergesetz (UStG). For example, you can write: "According to § 19 UStG, the invoice amount does not include VAT."
Information on German invoices: The checklist
These mandatory information details apply to a freelancer invoice in Germany:
- Name and address of you and the customer
- Your tax number or VAT identification number
- Date of issue of the invoice
- Invoice number
- Type and scope of services
- Date of performance
- Applicable tax rate for the services
- Fee to be paid for the services
- Sum of sales tax or reference to exemption
- Invoice amount (gross, i.e. net fee plus tax)
- Discounts, for example rebates
There are also other possible components of an invoice that are not required by law, but are very useful:
- Account details
- Payment term
- Salutation and introduction
Invoicing software for support
Of course, as a freelancer you can write your invoice completely by yourself, for example in Microsoft Word or a design program. But there are many invoicing or accounting software that make your life easier. There you can use templates with the mandatory data, in which you only have to enter your data and your services. Totals and VAT are automatically calculated, and invoice numbers are automatically assigned consecutively. With some programs, you can even submit your advance VAT return directly from the tool to the tax office with just a few clicks.
This solution is much less error-prone than doing everything manually. After all, it would be very unpleasant if your client had to point out an error in your invoice. Or - even worse - you get in trouble with the tax office. So the cost of an invoicing tool is a good investment.
By the way: With 9am you can save this effort completely. For projects that come about through our platform, you are paid centrally by us. So you don't have to write invoices anymore and you don't have to wait long for your money. Learn more here.