Sole proprietor invoice to Canada
March 29, 2019 | 30,00 EUR | answered by Steuerberater Knut Christiansen
Hello,
I have a German business and work with a client in Canada as a software developer. Now I am writing him an invoice (in USD) and I am wondering how it must differ from the invoices to my German clients?
- What additional information do I have to include on the invoice?
- How does it work with the sales tax?
- Under what category do I book this invoice in my tax return (line)?
- Is there anything else I need to consider?
I look forward to your assessment!
Best regards
Good day and thank you for your inquiry, which I would like to answer as follows in the context of an initial consultation.
In general, please invoice with all details as you would for a German customer. If necessary, translate the text into English. I would recommend invoicing the amount in Euros and then converting it to USD.
Important: since your customer is also a business owner (as I understood), the place of service for tax purposes is in Canada. Therefore, the service is not taxable in Germany. Do not show any sales tax, but indicate the Reverse Charge procedure on the invoice. This means that your customer is responsible for paying the sales tax (in Canada).
Report such income in line 15 of the EÜR attachment. Enter the net value in line 110 of the sales tax return.
I hope this answers your question, but feel free to ask any further questions at no cost.
Best regards,
Knut Christiansen
Tax advisor
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