A few things are common in Germany, otherwise we would not be in Germany, the Munich Oktoberfest mostly takes place in September, the friendly soccer clubs never become German champions, and sales tax is on bills. There are only exceptions to the last rule: Sometimes there are reasons why an invoice is not provided with sales tax – and if you write such an invoice, make sure to include a note on it.
What is sales tax? tax principle
In principle, every company in Germany is obliged to levy sales tax. In principle, sales tax must be charged when goods and services are exchanged. The service provider must add a tax to the pure value of the goods or services, which he pays to the tax office after the invoice has been issued. In this way, the entrepreneur collects a tax for the state as soon as he provides services. In return, companies are allowed to deduct the so-called input tax from their own incoming invoices from the VAT to be paid. This regulation relieves entrepreneurs of sales tax. Private and public consumers, on the other hand, have to pay sales tax, which is also called sales tax to pay in full because the prices of goods and services are correspondingly more expensive. But this tax principle also has exceptions. Here you can make use of the sales tax calculator now.
The following list shows the most common cases in which an invoice is not provided with sales tax, but does not claim to be complete.
Invoice without sales tax
Invoice without sales tax due to small business regulation
If you take advantage of the small business regulation, this means that you forego input tax deduction for limited sales per year, but you do not need to add sales tax to your invoices. Your invoices must then have a note such as “No VAT identification, as small business owners according to § 19 Paragraph 1 UStG” or “Not subject to sales tax according to § 19 1 UStG”.
Invoices abroad (reverse charge procedure)
For invoices in the reverse charge procedure (invoices to other EU countries) the tax burden is reversed. Specifically, this means: You don’t collect sales tax from your customers and pay it to the tax office – the customer pays the sales tax himself to the tax office in their own country. That’s why you don’t charge sales tax on your invoices to companies in other EU countries. Here you need a reference to the missing sales tax: Note on your invoice ” Tax liability of the service recipient “. The prerequisite for the success of the reverse charge mechanism is your recapitulative statement which you abgibst principle regularly.