Create Correct Invoice In Germany [Legally Correct Invoices]

Key Takeaway

Every invoice (Rechnung) must contain mandatory information as stated in § 14 of the VAT Act.
Incorrect invoices can lead to cancellation of services and troubles with the tax office.
As of January 1, 2025, every business is required to be able to process e-invoices for B2B transactions.
Business owners must use proper, GoBD-compliant invoicing software.

This is how you do it

Use accounting software to create and send GoBD-compliant invoices to your customers.
You are legally required to store your invoices for 8 years (as of 2025). Earlier, the retention period was 10 years.
Never edit an invoice that has already been issued and sent. Use a cancellation invoice instead to cancel the incorrect invoice, and then send a new, correct invoice.
We find the following accounting software to be the best in Germany: Sevdesk* (English, German), Lexware* (German), Wiso (German), and Accountable* (English).

What is an invoice (Rechnung)?

An invoice (rechnung) is a time-stamped document that a seller issues to request payment from the buyer. It records the details of a transaction, such as:

The date when the goods or services were delivered
The quantity and description of the services
The information of the service provider
The information about the service recipient
The gross amount (including taxes), etc.

Every business owner (including freelancers), regardless of their legal form and income, must issue invoices after making a sale.

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Why are invoices (Rechnung) important?

Invoices are important because they:

Serve as legal proof that a business transaction indeed occurred between two parties.
Help business owners keep track of payments and purchases.
Aid in understanding cash flows during bookkeeping.
Aid in preparing financial statements.

Types of invoices in Germany

Aside from the standard incoming and outgoing invoices, there are other types of invoices that you, as a business owner, should know about:

Recurring invoices (Dauerrechnung)
Interim invoices (Abschlagsrechnung)
Cancellation invoices (Stornorechnung)
Credit note invoices (Gutschrift)
Small-value invoices (Kleinbetragsrechnung)

1. Incoming invoice

When you purchase a product or service from another business, you receive an invoice to make the payment. This is called an incoming invoice.

2. Outgoing invoice

When you sell a product or service to a customer, you must issue a valid invoice. This is called an outgoing invoice.

The customer has the right to request a legally correct invoice before making payment.

3. Recurring invoices (Dauerrechnung)

A recurring invoice (Dauerrechnung) is an invoice issued periodically for the regular use of a service, such as rent payments or software subscriptions.

4. Interim invoices (Abschlagsrechnung)

Interim invoices (Abschlagsrechnung) are issued in installments until a project is over. This type of invoice is used in long, high-cost projects.

For instance, if you are developing a website for a company. You will issue an interim invoice (Abschlagsrechnung) during the:

Initial phase of the project
Mid-project phase
Final phase of the project

After the project is completed, you will create a final invoice and offset the advance payments against it. Depending on the remaining amount, you’ll either request additional funds or refund the excess amount.

5. Cancellation invoices (Stornorechnung)

Cancellation invoices (Stornorechnung) are used to cancel already issued invoices. It contains the negative invoice amount. You (as a business owner) will send a cancellation invoice if

Your customer cancels the order: to show that the order is cancelled.
Your customer requests a refund: to show that the refund is being processed.
Your previous invoice contains errors: to cancel the incorrect invoice. After canceling the incorrect invoice, you’ll send a new, correct invoice.

NOTE: The cancellation invoice has its own unique invoice number.

What are the steps for correcting an incorrect invoice in Germany? ->

6. Credit note (Gutschrift)

A credit note (Gutschrift) is a way in which you (service provider) get paid for your services or products without issuing an invoice. Instead, the business that received your service or product issues the credit note.

Example: Suppose you are a blogger enrolled in affiliate marketing. You advertise a company (MySampleCorp) on your blog. MySampleCorp pays you for each lead that comes from your blog.

In this case, MySampleCorp received the “advertising” service from you. MySampleCorp then issued a credit note based on the number of leads and made the payment to you.

In the whole process, you didn’t issue an invoice for your “advertising” service. Instead, MySampleCorp issued a credit note.

Other examples include the publishing house paying authors’ royalties, Amazon Marketplace paying its sellers, etc.

7. Small-value invoices (Kleinbetragsrechnung)

A small-value invoice (Kleinbetragsrechnung) is a simplified version of the standard invoice. A business owner in Germany can issue a small-value invoice if the gross invoice amount is under €250 (as of 2025).

Examples of small-value invoices include:

Cash receipts (if you are selling products in a craft market),
Train tickets,
restaurant receipts,
Tax receipts, etc.

Small-value invoices are commonly used in retail, gastronomy, and service industries. These invoices are convenient for business owners as you don’t have to

Ask your customer’s name or address,
Provide your tax number, or
Mention the invoice number

You can create small-value invoices using the following tools:

POS systems
Receipt pads (for handwritten invoices)
Ticket machines
Systems and software for ticket sales

What are the invoice formats in Germany?

In Germany, there are three types of invoice formats:

Paper invoices (Papierrechnungen)
Digital invoices (Digitale Rechnungen)
E-invoices (E-Rechnungen)

1. Paper invoices (Papierrechnungen)

Paper invoices (Papierrechnungen) record the transactions between the buyer and the seller in a physical document. They are printed.

For example, you use an “invoice book” or create an invoice in “Word” and print it out.

NOTE: If you opted for small business regulation (Kleinunternehmerregelung), ensure the “invoice book” you use doesn’t contain a “19% VAT included” print.

We recommend using accounting software to issue legally compliant invoices digitally. We find the following accounting software to be the best in Germany: Sevdesk* (English, German), Lexware* (German), Wiso (German), and Accountable* (English).

2. Digital invoices (Digitale Rechnungen)

A digital invoice is created on your computer and distributed through email in a PDF or TIFF format. The most preferred format is the PDF format.

You can use any accounting software to create legally compliant invoices in Germany.

3. Electronic invoices or E-invoices (E-Rechnungen)

An electronic invoice or e-invoice displays transaction information in a machine-readable format. It is issued, received, and processed electronically between the service provider and the recipient.

Don’t confuse an e-invoice with a PDF invoice. They are two different invoice formats.

NOTE: From January 1, 2025, all businesses (including freelancers) in Germany must be able to receive e-invoices for domestic B2B transactions. This applies regardless of company size or annual turnover.

More on e-invoicing in Germany later in this guide.

What information must a German invoice contain?

In Germany, a correct invoice must contain information stated in Section 14 of the Value Added Tax Act (Umsatzsteuergesetz).

Mandatory information in the invoice	Description
Invoice issuer details	Company name and address of the issuing company
Invoice recipient details	Company name and address of the invoice recipient
Tax number/VAT ID number	You (the invoice issuer) must include either your tax number or VAT ID on the invoice. Otherwise, it’s invalid. If you are applying the “Reverse Charge Procedure“, the VAT IDs of both you and the recipient must be included on the invoice.
Invoice date	The date when the invoice was created
Invoice Number	– Every invoice must have a unique invoice number. – You can number your invoice sequentially or by any other system. – You cannot have two invoices with the same invoice number.
Date or period of service	Time of delivery or the period of the service
Invoice items	Quantity and description of the goods or services sold
Net invoice amount	The net amount of the product or service. (without the tax rates, pre-agreed deduction, or discounts)
Vat rate	The VAT rate: 19%, 7%, or 0%
Vat amount	Vat amount
Gross amount	Net invoice amount + VAT amount
Special mentions	If you don’t charge VAT, mention the reason in the invoice. – Small business regulations (Kleinunternehmerregelung): Mention the following in the invoice: No VAT shown, as a small business according to Section 19 UStG (Kein Ausweis von Umsatzsteuer, da Kleinunternehmer gemäß § 19 UStG.) – Reverse charge procedure: Mention the following in the invoice: The VAT liability is transferred to the service recipient (reverse charge system). (Die Umsatzsteuerschuld geht auf den Leistungsempfänger über (Reverse Charge System))

All invoices must contain the above information except for small-value invoices.

What information should small invoices in Germany contain?

According to Section 33 of the VAT Act, the following information is enough when creating small-value invoices (gross invoice amount less than €250 (as of 2025))

Name and address of the service provider
Description of the delivery or service
The gross amount of the service
VAT rate (or an explanation of why the VAT is not shown)

NOTE: Small-value invoices are also used to claim input tax (VAT). So when issuing or receiving small-value invoices, ensure it includes how much VAT is charged.

Other useful information you should add to your invoices in Germany

Outside of the mandatory information stated in the above table, you can also include the following information in your invoices:

Payment deadline
Bank details
Details of the managing directors or founders of the company
Commercial register entry (if available)
Telephone number and email address for inquiries
Web address

Here is what an invoice looks like.

How do you create a legally correct invoice in Germany?

You can create invoices in three ways

Manually on paper
Using software like Word or Excel
Using an accounting software (recommended)

The German government is implementing e-invoicing to digitalize bureaucracy. In the future, you’ll need to issue and receive e-invoices for all B2B transactions. The e-invoicing may also be extended to B2C transactions.

Thus, it’s better to set up your infrastructure to support e-invoices from the start. The easiest way to achieve this is by using a GoBD-compliant accounting software.

A good accounting software can

Create invoices in your desired formats (PDF, X-Rechnung, ZUGFReD, etc.)
Ensure the invoice is legally compliant
Automate invoice amount calculations. Thus, eliminating the calculation error.
Minimize the risk of errors when applying VAT or discount rates
Maintain consistent invoice numbers and detect potential duplicate invoices
Tracks payments
Sets up automatic reminders for late payments
Automatically detects if an invoice is paid (assuming you connected your business bank account with the accounting software)
Retain invoices until the legally required retention period has expired.
Easily accessible for you and your tax advisor (if you allow them access).
Customise invoice templates.

Sevdesk Accounting Software

The basic plan costs 8.90€ per month.
GoBD compliant.
Suitable for every legal form.
Available in both English and German.

Go to Sevdesk*

Lexware Accounting Software

The basic plan costs 6.90€ per month.
GoBD compliant.
Suitable for every legal form.
Available in German only.

Go to Lexware*

Accountable Accounting Software

You start with Accountable for free.
GoBD compliant.
Suitable for freelancers and small business owners only.
Available in both English and German.

Go to Accountable*

When should you create an invoice in Germany?

According to Section 14 of the Value Added Tax Act, entrepreneurs must issue an invoice after (or within six months of) making a sale or delivering a service.

How long should you retain an invoice in Germany?

All received and issued invoices must be archived for eight years (Section 14b of the German Value Added Tax Act (UStG)).

You can archive paper invoices digitally (via scan or digital photos) or physically in a file. If you store the paper invoices digitally, you must create a “procedural documentation (Verfahrensdokumentation)” in which you define the scanning process.
The original copy of your digital and electronic invoices must be stored in your system.
The retention period begins at the end of the calendar year in which the invoice (Rechnung) was issued. There is an exception if the invoice is still relevant for tax calculation. Suppose you issued an invoice in 2024. Ideally, the retention period must start from 1 January 2025. However, suppose you postponed filing the 2024 tax return until February 2026. In this case, the retention period will also be postponed and start from 1 January 2027.

What are the e-invoice requirements in Germany?

Germany is introducing e-invoicing in several phases. Here are the timelines and requirements you must be aware of as a business owner.

From January 1, 2025
- All businesses (including freelancers) in Germany must be able to receive e-invoices for domestic B2B transactions. This applies regardless of company size or annual turnover.
- Issuing e-invoices is NOT yet mandatory. This means you can still send paper or PDF invoices during the transition period. However, the recipient must agree to it.

From January 1, 2027
- Businesses with an annual turnover exceeding €800,000 (in the previous year) must issue e-invoices for domestic B2B transactions.
- You can no longer send paper, PDF, or non-EN 16931-compliant invoices.
From January 1, 2028
- All businesses, regardless of turnover, must issue e-invoices for domestic B2B transactions.
- You can no longer send paper, PDF, or non-EN 16931-compliant invoices.

NOTE: E-invoice mandate applies to all businesses registered in Germany, regardless of their legal form.

The legal basis for e-invoices and mandates is

Growth Opportunities Act (Wachstumschancengesetz)
§14 German VAT Act (Umsatzsteuergesetz, UStG)

In which cases are you not required to issue an e-invoice in Germany?

You are not required to issue an e-invoice in Germany in the following cases:

Small-value invoices: Invoices with a gross invoice amount of less than €250 (as of 2025) (§33 UStDV).
Invoices for tickets, such as passenger transport tickets (§34 UStDV).
Invoices for products or services exempt from VAT, such as certain financial and insurance services, medical services, and educational services (§4 Nos. 8–29 UStG).
International transactions: Transactions between businesses in which one company is located outside Germany. The e-invoicing mandate applies only to B2B transactions where both supplier and recipient have an establishment in Germany.

What are the official e-invoice formats in Germany?

In Germany, there are five formats for issuing e-invoices:

XRechnung: It is based on the European standard EN 16931 and defines a structured XML format for electronic invoices. XRechnung is mandatory for invoicing to public contracting authorities.
ZUGFeRD (Zentraler User Guide des Forums elektronische Rechnung Deutschland): ZUGFeRD is a hybrid format that combines both a visual representation (PDF) and machine-readable data (XML) of an invoice.
UN/CEFACT Cross Industry Invoice (CII): An XML-based format developed by the UN/ECE and used internationally.
UBL (Universal Business Language): A standardized XML document format for the electronic exchange of business information.
Factur-X: A hybrid format that combines ZUGFeRD and the French FNFE mandate, containing both structured data and a PDF in one file.

XRechnung and ZUGFeRD are the most common e-invoice formats used by businesses in Germany.

FAQs on invoicing in Germany

Can I change the currency on the invoice?

Yes, you can change the currency on the invoice if your customer is from a different country. However, your bank might charge additional fees for international transfers.

Can I put my logo on the invoice?

Yes, you can put your logo on the invoice. However, ensure your logo is unique and does not resemble other existing brands. To check whether your logo is already registered as a trademark, you can use the database of the German Patent and Trademark Office.

Can I create invoices in different languages?

Yes, you can create invoices in different languages. You can create multilingual invoices using accounting software. Ensure that you retain the German or English copy of the invoices, as some tax offices don’t accept invoices in a foreign language.

Can I edit my German invoice?

You can edit your invoice if it’s still in your drafts. You cannot edit sent or received invoices. In case of errors, you must send a cancellation invoice to cancel the previous invoice. Then, you should send the corrected invoice.

If your incoming invoices are wrong, you must request a correction from the invoice issuer (service provider). You are not allowed to edit an incoming invoice yourself.

How to create an invoice if the small business regulation applies?

If you are a small business owner (Kleinunternehmer), you should include all mandatory information as stated in § 14 UStG, except for VAT. Instead, you must include a note explaining the reason behind the VAT exemption.

Your invoice must contain the following note: No VAT shown, as a small business according to Section 19 UStG.

You can read more about it here.

How do you invoice a domestic customer?

If you are invoicing a domestic customer, include information as required by § 14 UStG, apply tax and VAT rates (or include a reason for VAT exemption), and the gross amount for the goods and services provided.

You can read more about it here.

How do you invoice clients within the EU?

When invoicing business clients within the EU, make sure to include the following:

– Information as required by § 14 UStG
– Your VAT ID.
– If you apply the reverse charge procedure, include the VAT ID of both you and your customer.
– Apply tax and VAT rates (or include the reason for VAT exemption—small business regulation or reverse charge procedure)

You can read more about how to issue legally correct invoices here.

How do you invoice customers residing outside the EU?

You don’t charge VAT to customers residing outside the EU. Therefore, you issue a VAT-free invoice that includes the information mentioned in § 14 UStG.

Create Correct Invoice In Germany [Legally Correct Invoices]

Key Takeaway

This is how you do it

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