Invoicing, deduction of operating expenses
August 10, 2012 | 25,00 EUR | answered by Michael Herrmann
Dear Sir or Madam,
I am referring to the question regarding §14 of the German Value Added Tax Act (if a business owner hires a student for a service once or twice a year - without value added tax):
1. Does the student need to issue an invoice (without VAT) for the business owner to deduct it as an operating expense? Can the operating expense be proven with another document?
2. If yes, what mandatory information should this document contain?
3. If the student were based in another EU country or a third country, what mandatory information would be required in a document/invoice?
Thank you for your response.
Dear inquirer,
First of all, thank you for your inquiry, which I would be happy to answer based on the information you provided and considering your commitment in the context of an initial consultation. The response is in accordance with the facts presented. Missing or incorrect information about the actual circumstances can affect the legal outcome.
Every invoice issued by a small business for services rendered must include certain mandatory information in accordance with § 14 (4) of the Value Added Tax Act. These include:
• the name and address of the person who provided the service
• name and address of the invoice recipient
• the tax number or VAT identification number of the small business
• the date of invoicing
• the consecutive invoice number
• the quantity and type of service provided
• indication of zero taxation when applying the small business regulation
• the specific time of service provision or goods delivery
These points must be strictly adhered to. If the mentioned information is missing in the invoice, the invoice is not valid.
For invoices with an amount not exceeding 150 euros (small amount invoices), the legal requirements for invoicing are simpler. Here, neither the tax number nor a consecutive invoice number is required, and the VAT, if applicable, does not need to be specified as an amount. It is sufficient if the invoice includes the total amount and the indication of the applicable tax rate or the mention of zero taxation.
Billing is possible with any document, as long as it includes the mandatory information.
The location of the service provider is irrelevant.
I hope that these details have provided you with a sufficient overview of the situation in the context of your commitment and this initial consultation.
Best regards,
Michael Herrmann
Diploma in Financial Management (FH)
Tax consultant
