I coach English-speaking freelancers on setting themselves up as self-employed in Germany. A typical coaching will take you through the basics – how to get a freelance tax number, what information you need to have on your invoices, how the Finanzamt will treat you for tax purposes, information on the insurance system, dealing with clients in other countries, tips and tricks I’ve picked up along the way.
Over the years, I’ve gathered a list of issues that really perplex expats. You might not think these things are a big deal right now, but they certainly would be if you get audited 5 years down the track. Here are some tips for starting out your German freelance adventure with great accounting habits.
1. Your Tax Identification Number does not belong on your freelance invoices.
When you registered your address, you probably received a tax identification number called a Steueridentifikationsnummer (St-IDNr.). The number is 11 digits long. Store it in a folder and pull it out if you ever get an employment contract or need to give it to a German public offices. It does not belong on your client invoices. For those, you need a Steuernummer. It’s 10 digits long, grouped like this (e.g. 12/345/67890). To get this number, you have to fill out a seven-page form and submit it to the Finanzamt, so that they can decide on how to treat your business for tax purposes before you start sending invoices. Talk to Red Tape Translation if you need support with this process.
You CAN put your VAT ID number (USt-IDNr.) on your invoices instead of your Steuernummer. But your St-IDNr. has no place on your invoice, just as chicken has no place on a pizza.
2. You need a legal statement at the bottom of your invoices that explains your VAT calculation.
That is, unless you’re charging the standard 19% VAT. If you’ve opted to take advantage of the small business rule and you neither charge VAT on your invoices nor claim VAT on your expenses, it will look something like this:
Gemäß § 19 UStG wird keine Umsatzsteuer berechnet. (In accordance with §19 of the German VAT law, no VAT has been added to this invoice.)
If there’s another reason why you’re not charging 19% VAT, there will be another clause to quote. You might be charging 7% VAT because you’ve granted copyright to a client for your intellectual property. You might be doing reverse charge VAT for a client within the EU, or charging no VAT because they’re a business based in the USA or Australia. Either way, make sure to justify it on your invoice by quoting the relevant paragraph of the VAT law. Every. Single. Time.
3. Make sure your invoice numbering system is logical.
It’s common to hear this advice: “Generate random invoice numbers with multiple digits so that your clients think you have more customers than you really do.” The idea is good but if you get audited, you risk getting an earful. So do it smartly.
Case study (a true story): Jonathan got audited for 2013. He had sent out 75 invoices in total and numbered them consecutively (the last invoice number was 2013-75), but he couldn’t account for invoices 13, 44, 47 and 69. They were missing. He must have just skipped the numbers.
The Finanzamt looked at Jonathan’s average invoice amount. Most of his invoices are for approximately 250EUR, so they assumed that those 4 missing invoices must have been for 250 Euros each. They determined he’d made an extra 1000 Euros in 2013 that he needed to pay tax on. No big deal, Jonathan was happy with that solution.
But if your highest invoice number is #2017-141 and in reality, you’ve actually only sent out 70 invoices, it looks like you’re hiding a whole lot of invoices. It will raise some red flags. There are plenty of ways to organise your numbering system so that your client has no idea how many invoices you send out. For example, Year-Month-Day-Invoice No. or Year-Client-Invoice No.
2017-0704-0001 (this looks like you expect to send out at least 1000 invoices on the 4th of July)
2017-KP-0001 (this looks like you expect to send your new client Kathleen Parker at least 1000 invoices).
4. German clients will often demand a correct and complete invoice before paying you.
Your American, Canadian (etc.) clients usually just pay you with a Paypal money request and they don’t think anything of it, but don’t be surprised if your German client hassles you for a correct and complete invoice before they pay you. This is because if important information is missing, the Finanzamt might not allow your German client to deduct your invoice as a business expense. If something doesn’t look right, your client will ask you to correct it before they issue payment.
5. If you don’t submit a profit and loss, the Finanzamt will look at what you told them you’d earn.
Remember that form you filled out, the Fragebogen zur steuerlichen Erfassung? You made some predictions about what you would earn in your first year of business and your second year of business. The Finanzamt used this information to work out how to treat you for tax purposes.
Fast forward 18 months later. Life got complicated and you forgot to submit a profit and loss. That’s OK, says the Finanzamt. We’ll just use the information you already gave us. You said you’d earn 27,000 EUR in 2017, so we’ll just make you pay income tax on 27,000 EUR.
Fine, if your predictions were accurate. Devastating if you ended up earning significantly less. So make sure you submit a profit and loss. You have until May of the following year if you do it on your own, or until December of the following year if you hire a tax advisor to do it for you.
This is all way too complicated for me.
That’s OK. I know some great English speaking tax and insurance advisors that are good at making sure you get things started with good habits. They can also help you find a good solution if you’ve made some mistakes along the way. I know I’ve made plenty!
Thanks for the info, I have a question. In case I’m a Kleinunternehmer and I build my own sites and order texts form a content writer: when he’s preparing invoices to send me, is just my name and address enough or does he also need to indicate my Steuernummer?
Actually, how does a proper invoice from another freelancer to me look? Many thanks for the answer
Hi MP the Curious,
If your content writer (or any other freelancer) is writing invoices under 150 Euros, he doesn’t even have to put your name and address on them, let alone your Steuernummer, but he should definitely include HIS address and his Steuernr. or his UST-IDNr. He also needs an invoice date, a description of the services, and information about how he’s calculated VAT if he’s not just charging you 19%.
If the invoice amount is over 150 Euros, he also needs to include your name and address, an invoice number and the date that the service was performed (month is fine). He doesn’t have to put YOUR VAT number or Steuernummer on the invoice, just his. If someone in another country is doing business with you, they might need to put your VAT number on the invoice to justify why they have or haven’t charged you VAT.
Hello, One question, I’m a non EU citizen and I am employed here ( my Visa actually allows me to work for the company I work for, and to work as a freelancer). So… I’ve got a possible opportunity of small freelance project to a Canadian company. Can I use my current steuernummer or would I need to go to finanzamt too? Also do I need to register somewhere, or I can just produce an invoice and than declare on my next year taxreturn?
thank you!
Hi Ramos, I can’t answer most of these questions without knowing more about you. Here are some things I’d need to know: are you ONLY resident in Germany or still active in Canada as a business? Have you worked as a freelancer in Germany before and already filled out the paperwork to get your Steuernummer? (Mentioning that you have a Steuernummer means there’s a good chance that you are already registered as a freelancer in Germany, but I need to be sure you’re not talking about the Steuer-ID Nr.) Also, is the new opportunity in the same field of work as your current Steuernummer? Or a different field of work? This will probably involve a conversation. Let me know if you want to book a coaching. Cheers, Kathleen!
Hi Kathleen,
Thanks for the great tips.
I’m a journalist and I often sell articles to media outlets in a non-EU country. I usually get payed for those in a bank account in that country, where I also do my tax returns although I’ve been living abroad for many years. All the taxes regarding these articles are payed in that country as well. I do this because some companies will just not pay me abroad.
My question is: do I have to send the companies in that country invoices from Germany? They already have all the paperwork for those commissioned articles filed locally.
When I file my tax returns In Germany, I will obviously list the payments for those articles as part of my income, but they should not be double taxed.
Cheers!
Hi Gabe,
Regardless of where your bank accounts are located, if you are registered as a business in Germany you should send invoices from Germany using your German freelance tax number / VAT ID number. I’m not sure why you’re doing tax returns in another country if you’ve been resident in Germany for many years and have a business here, unless you are still actively in business in that other country (e.g. you spend half the year here and half the year there, or something similar). Get a tax advisor to give you more specific advice on how to handle international tax affairs if you have active businesses in more than one country – that’s way too complicated for me!
I am only active/resident/in business in one country – Germany – so I have a German business and a German tax number, and all my invoices are sent from Germany. Nonetheless, I still have an Australian bank account and some of my Australian clients prefer to pay me there. Others use Paypal, others use US freelance work portals with attached e-wallets. Regardless of where the money lands, I still send them invoices from Germany as a German business because I don’t have a choice – I don’t have any other business numbers in any other countries. Hope that makes sense. If still in doubt, go see a tax advisor about your intercultural dealings, as that’s about where the limit of my expertise lies 🙂 Cheers, Kathleen
Hi Kathleen,
I am in the same boat – still have an Australian bank account and have Australian clients. I was wondering how you handle the currency exchange and reporting income that is paid in a foreign currency. The invoiced amount is in AUD, but for my records I also state the current currency exchange rate and the calculated amount in euros on the invoice. Is this also how you do it?
Cheers, Veronika
Hi Veronika. Pretty much. I bill in Euros and also put the AUD amount on the invoice in the footer. Sometimes the payment amount varies from the invoice amount, and I state the reason for this as “currency fluctuations” using my cloud-based bookkeeping software. Cheers, Kathleen
Hi Kathleen, thank you for the info! When writing an invoice to my clients (asking for pay) do I have to include their Steuernummer as well as mine? Thank you!
Hi Kathleen,
How do Finanzamt know that you are going to submit tax through steuerberater after end of May?
The thing is that I made a deal with some consulting agency two weeks ago to submit my tax declaration for 2017 and now they dont return my emails and calls and left me with no update on what they had done. I even didn’t get a copy of the Vollmact I signed and they kept all the original doc with them becuse they claimed the photocopier was out service photocopier.
So two qustions please,
1- What will happen with the finanzamt if they didnt contact them in my behalf?
Can I have someone else do it for me even if they did apply the vollmacht?
Thanks alot.
Hi Jo, the Finanzamt usually knows you have a tax advisor when they receive the Vollmacht (power of attorney) from the tax advisor. It could be that the consultants have every good intention of completing your tax return and know they have plenty of time to do so. It is not unusual for businesses of this nature to take their sweet time getting back to you in my experience :S
Either way, if you are not happy, you can give Vollmacht to another tax advisor, and the consultancy firm’s Vollmacht should become invalid, so that’s always an option. But then you’ll have to figure out how to get your original docs back! Plus, the consulting agency might bill you for work they claim they have already completed. In which case, you might consider using your Rechtsschutzversicherung if you have one, I guess it depends how you want to deal with disputes. But I am jumping the gun a bit. I hope this works out OK for you. It would stress me to the max as well. You could always, just out of curiosity, call the Finanzamt to find out whether they have even received the Vollmacht in the first place? Kathleen
Thnaks a million times Kathleen for your kind time and answer
Jo
Hey Kathleen,
I worked as a designer for 3 months, i invoiced my client an amount of €950. Do i need to pay taxes on this? I did not work elsewhere in this period of 3 months. I am a non-EU resident in Germany holding a 18 months job seeker visa, i completed my masters in Germany. I am exempt from paying tax? My total income for the year so far is €1350 (inclusive of the designing job).
Thanks!
There’s a tax-free threshold of around 8,000 Euros (I don’t know the exact figure), so if you only made 1350 Euros for the entire year, you will not have to pay income tax on that amount. Just be aware that a job seeker visa does not actually give you permission to work.
Hi! I have my freelance visa and steureunummer. However, I recently had another job title added tonmy visa. Do I need to go back to tge finance office to have them include the new job title on my steireunummer? Thank you!
Isabelle
You should inform the Finanzamt about your new working activity, yes. It might change how they treat you for tax purposes.
Hello Kathleen,
Help! Hello, I am from Taiwan and I am on a work and holiday visa, and I intend to apply for the “freelancer visa” in November.
I was invited to exhibit sculptures in a gallery and my works are sold, now the gallery requested invoices from me. Can I just issue an invoice with my details and tax number from Taiwan? As I do not have a tax number here yet, I do have a identifikationsnummber but I know that is only for other employment only. Please let me know, thank you
Hi Veronica, if you have registered your address in Berlin, then you are officially a German resident and you should bill from Germany if that is your main residence. I’d wait until you get the freelancer permit, then get a freelance tax number from the Finanzamt, and THEN send an invoice to the gallery. Anything else might not be the “correct” way to do things.
Hi Kathleen, most of my clients are based outside Germany. Do the invoices need to be in German or can they be in English only?
English is fine.
Hi!
Thanks for all the info!
I’m wondering if there’s any solution for someone in the situation of being a EU citizen, a student and only working a little on the side so sending invoices for about EUR 200 a month. I can’t seem to find a way around the health insurance requirement, cheapest I could find was for about 170 a month but then my invoiced amount would barely cover it…
Thanks a lot in advance!
All the best,
Stina
Hi Stina. I’d talk to a health insurance advisor to find out if there’s a solution for you. If you’re a student at a German university and publicly insured, your health insurance as a student should be around 90/month.
Hi Kathleen,
Big thanks that I found this site. I´ve been sending inquiry but even the Finanzamt that I spoke didn’t know the right answer.
I am a self-employed now forming a company (GmbH). Can I still use my previous Steuernummer as employed to issue a personal invoice (not on behalf of the company) while waiting for the official registration and establishment?
Is it mandatory that I would have VAT ID for my invoice? or invoicing without VAT, my client’s company is based outside Germany.
Or is it possible to switch my previous steuernummer to self-employed? How?
Hope to hear from you urgently.
Thank you.
Hi Len, If you are talking about the Steuer-ID-Nummer, then you can never use that number to write an invoice. If you are talking about your freelance/self-employed tax number, and you are continuing your work as a freelancer as well as forming the GmbH, then yes, you should be able to use that freelance tax number for the invoice as you always have in the past. Unless, in registering your GmbH, you closed your sole trader business? Just be aware that come tax time, as well as doing all the necessary paperwork for the GmbH, you will still need to submit a profit and loss for your freelance/self-employed tax number as part of your personal tax return.
I don’t have a freelance visa, but work as a nanny for a few families. There are new families that would like to employ me and bill me via invoice. Is this possible without a freelance visa?
If you are invoicing them, you need a freelance permit. If they’re employing you, you need an au pair permit or an employment permit (but this would be hard to get for a nannying job). Anything else is Schwarzarbeit (illegal).
Hi Kathleen,
Thank you so much for this information!
I’m curious, do US companies need to do anything special to set me up as a contractor that’s based in Germany? Since I’ll be providing my German Freelancer ID vs. my US SSN on my invoice, wouldn’t they have to file differently? Or they can go on how they would typically set me up, just using that different id number?
In that case, am I correct in thinking that the only changes to invoicing my US client as a German freelancer is 1. German Freelancer ID instead of US SSN 2. German bank account details for deposit 3. Note at the bottom about not paying VAT. (Also wondering where can I find the exact VAT law to correspond to US companies?)
Curious if you have any recommendations on tax consultants to work with in Berlin.
Thank you,
Stephanie
Hi Stephanie,
I have no idea what American companies need to do from their end, unfortunately. One thing to be aware of is if they are contracting you in Germany and you are working for them more than 30 hours a week, you might eventually run into problems with the concept of being scheinselbstständig. So make sure you have other clients too and aren’t completely dependent on one company.
Your invoice as to have your German Freelance tax number, your address in Germany and the note at the bottom about not charging VAT because it’s a B2B transaction with a “third country”. The exact VAT law is §3a Par. 2 of the UStG.
Tax consultants: have a look at Nicolas Bouliane’s blog post here.
Thank you so much, Kathleen!
hi,
Can i claim my interest of personal credit as business expenses and deduct from my tax excemption?
2.I am permanent employee now and want to start my freelancing activity any impact on tax if i do parallay?
if i want to be full time freelancer after leaving my permanant job..what steps i need to do?
Hi Neel. 1. I doubt it, but ask a tax advisor. 2. You pay income tax on all your sources of income, be they freelance or employed. So if you earn more beause you are doing more, you will pay more income tax. 3. This is complex and depends on many things. Let me know if you’d like a coaching. Cheers, Kathleen
Hi Kathleen,
I’m glad I found your website. I’ve got a one-time opportunity and I’m doing a couple of days job for a company in the UK. I live and work in Germany, so I already have a Steueridentifikationsnummer. I would need to issue an invoice to get paid for an amount over 150EUR. How should I do it? Do I need to apply for a Steuernummer to be able to issue the invoice? Is this the only way to get paid? Thank you, Gergo
Yes, if you are freelancing all of a sudden, then yes, you are supposed to get a freelance Steuernummer. Have a look here. It’s a lot of trouble to go to for a once-off opportunity, so I hope the amount you’re receiving is WELL over 150 Euros. Because you’ll also have to submit a profit and loss for 2018 as part of your tax return next year.
HI, kathleen !
im an artist and i sold 3 of my works in a small gallery shop. this are the first 3 that i sell as an artist in germany. i never did an invoice and now they are asking me for a formal invoice. can you , or somebody help me with a template of an invoice ? also each artwork costed 100euro and i sold 3 of them. the gallery took the 50% so i only earn 150eu. also i dont have VAT or steuernummer. i was student until 2 months ago, and im EU Citizen! i need some help!
Hi Andres – sounds like you have to set yourself up as a freelance artist before you can send invoices! If you want a coaching to take you through that process and to go through what you need to put on your invoices, you can book one online. Cheers! Kathleen
Hi Kathleen,
I work at the freelance portal and performed some work for my clients in 2018, but I was able to get money on my bank account only in 2019. Should I report those money for 2018 year or it is a 2019 income. Also, is there any regulation in what term after the job completion I must to send an invoce?
Hi Ivan,
I am not a tax advisor so this isn’t qualified advice or anything, but if the money hit your account in 2019 and you didn’t send any sort of invoice, I would just make it 2019 income and write the invoice dated January. I think you are supposed to send an invoice within 6 months of performing a service.
Hello Kathleen. What a wonderful service you are providing! I’ve done a lot of research and leveraged input from other freelancers, but I have a question for which I cannot find the specific answer.
I have registered as a freelancer and have my tax number and my VAT number. I project that I will probably exceed the minimum threshold for income this year – so VAT will be required in 2019. (I started my business last year with income less than the threshold).
I have a residence card for Germany.
I do consulting and coaching work. I typically contract with a larger firm and provide services to their clients. In a sense, I am sub-contracted. This firm is based in Northern Ireland, but we provide services across the EU – to include the UK. I send my invoices to the firm in NI.
1) Am I required to charge VAT to the firm in Norther Ireland (NI)?
2) If the contracted services are delivered to businesses in Germany, would I need to charge VAT to the NI firm?
3) If services will be delivered in another EU country, will I need to charge VAT?
4) If I am not required to charge VAT to the NI firm, do I quote the §3a Par. 2 of the UStG on the bottom of the invoice?
Thank you for your help. I appreciate any information you would like to share.
Hi Elaine. So sorry, but those are questions for a tax advisor, not for me. My best guesses are:
1. as long as NI is part of EU and as long as the service is B2B, I think no.
2. I still think no but am questioning my judgment.
3. If B2B (ie. via the firm in NI), no, if B2C, yes.
4. yes – this is the place of supply regulation for B2B.
Please take my answers with a grain of salt and consult a tax advisor.
Cheers
KP
Hi, I am a freelance translator in Germany and my incomes might exceed 17500€ this year, which means I am supposed to collect and declare VAT every 3 months, but the company I work the most for claims “that between two parties of which at least one has a VAT number in Europe, the VAT is not applicable, since taxes are to be paid by both parties in the corresponding countries.
Invoices are issued electronically through your profile, according to the tax status indicated. That means you do not have to apply VAT when submitting your invoices to us, but you have to pay your taxes in your home country.
For more information please go to the following link:
https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/where-tax_en#supply_services”. What do I need to do now? Find another customer? Thank you in advance for your help
Hi Isabelle. No, you don’t have to find another customer. It sounds like the client is telling you that you don’t have to charge VAT on your invoices to them. They might be right. There are complex rules that change according to which countries you are dealing with. E.g if your client is an American business with an American business number (EIN), you don’t have to charge VAT on your invoices, you just quote the rule §3a (2) for the exemption. If you don’t believe them, you can always get an opinion from a tax advisor. But don’t ditch them, I think they’re trying to help!
Hello,
I just arrived in Germany and set myself up as a freelancer, and I opted to pay/get VAT. I was wondering if I need to do the monthly declaration even during months when I have not received or made any payments? Or do I need to declare it all at 0?
Thanks for all your articles, they are extremely helpful to navigate the German system.
Hi Audrey – I’d put in a zero statement for those months. Thanks for the compliment! Kathleen
Thank you so much for your quick reply.
Hi Kathleen,
I’m providing freelance proofreading services to companies outside of Germany, but within the EU, and so I have been putting a statement on my invoices to say that VAT is being reverse-charged (I have a VAT number and am registered as a Kleinunternehmer). I’m just now confused as to whether I also need to be filling out a monthly “Zusammenfassende Meldung”. If you have any advice on this I’d really appreciate it!
Thank you very much,
Gemma
Hi Gemma, If you are registered as a Kleinunternehmer then there’s no need to put any VAT on any invoice you write. You just include the legal basis §19 UStG and an explanation that because you are a Kleinunternehmer, no VAT has been added to this invoice. P.S. You can have a VAT-ID number and still be a Kleinunternehmer and still not charge VAT. Having a VAT-ID number does not obligate you to charge VAT. I’d change those invoices if it’s not too late to do so, or at least make a note of all the invoices you wrote that have a false statement on them and explain it to your bookkeeper/tax advisor, who will know how to fix it. You shouldn’t have to do the Zusammenfassende Meldung if you are a Kleinunternehmer. Cheers, Kathleen
Hi Kathleen,
Thanks so much for the time you take to answer the comments and write these very useful articles.
I would also add that invoices MUST contain certain mandatory information, otherwise it is not legally valid. It happened to me that my customers did not pay the money or delayed the payment because I forgot one info (time of the delivery of a photo-shoot for example)!
I was wondering if you have heard about specific bank accounts for expat freelancers. I have found this one (https://kontist.com/offers/expats?media_source=content&af_channel=forums&campaign=content_forums_nua_all_forum_behavioural_de_en) where you can also connect to your accounting software and forecasts of the taxes you owe to the Finanzamt. What do you thing about this kind of tools?
Best and thanks in advance,
Laura
Hi Laura (that’s my baby’s name!)
I think Kontist is great, actually. The best thing about it is that you can immediately see how much of the money flowing in is yours for the keeping. I know a lot of people who use it and swear by it. Thanks for the compliments. Cheers, Kathleen
Hi Kathleen, I am a EU citizen and i will provide consultancy services to a Belgium company. I live in Germany and i am registered here with a Freelance tax number. How is the process to create the invoices. Do i need to do something else from my side and what information do i need from the client side?
Thanks for all the valuable info you have on this blog!
Hi Valentina, As I understand it, you need their VAT ID number and should put it on the invoice. It will most likely be “Reverse Charge VAT” since Belgium is in the EU. So you don’t have to charge VAT on the invoice as far as I understand. Having said this, I am not qualified to give tax advice and therefore I could be wrong, so get the opinion of a tax advisor to be absolutely sure.
Hi Kathleen,
This article is very helpful. I am french and based in Berlin where I registered as Gewerbe. My main client is French therefore I need to put that this is a “reversed VAT” at 0% on my invoice (my invoice will account for higher than 17500€).
Where can I find the right paragraph from the VAT law referring to this and can I state it in english on my invoice rather than German ?
Do I still need to declare the 0% VAT every month on ELSTER ?
Thank you so much
Lou
Hi lou,
It’s Reverse Charge VAT (§3a Par. 2 UStG). English is fine. I don’t know whether you need to make VAT declarations every month on ELSTER – it depends on what the Finanzamt instructed you to do. If the Finanzamt has told you to submit monthly statements, then yes, you need to continue doing so, plus, since you have EU B2B clients, there’s also another declaration you need to submit as well. Unfortunately I am having a mental blank and I can’t remember what it is called! Ask your tax advisor.
Hello,
If I do not speak German is it ok for me to write my invoices in English or is it compulsory to find a translator and do it in German? Is there anywhere we can see a mock up of an invoice from a freelancer to a company?
Thank you in advance for your response
It’s fine to write your invoices in English. If you want a mock-up, here are a whole bunch of them for different scenarios.
Hi Kathleen,
In one of the Q&As above you mentioned that a Kleinunternehmer does not have to put “reverse charge” to EU customers’ invoices, but just the statement that they are Kleinunternehmers. I have been told otherwise, that the Kleinunternehmer statement should be on invoices for German customers, but if invoicing customers in other EU countries, then should apply “reverse charge”?
This may be also a question for a tax advisor, but in case you have experience: I am invoicing a customer in Ireland, and they – even though a business – do not have EU VAT ID. I suppose they have similar small business status in Ireland. How is VAT on invoices between two small business (I have EU VAT ID even though Kleinunternehmer, they don’t have)?
Hi Kathleen,
Thank you for the useful information.
I have a settlement permit in Germany that allows me to work as a freelancer here. I also have registered a Steuernummer in the Finanzarmt. My main income will be from an editing company (with a signed contract) based in Singapore. They send me an invoice every month with the amount of money I earn in that month (in USD), and the money is transferred to an online bank which is different than my local bank account in Germany. Everything is done online. Other than that, I also have few private clients that only account for a small amount of my monthly income. My questions are,
1. Do I have to generate my own invoice for the editing company? or the invoice they send me is sufficient for filing tax next year?
2. For those private clients, do I need to generate invoices for them?
3. Should the invoice number be continuous or different for different companies/clients?
Thank you!
Hi Doris,
I would look at the invoices issued by the Singapore company. They might not fulfill the requirements of the tax office in Germany, and if they don’t, I would generate and store invoices that do, just in case you’re ever asked to provide them. Same for the other clients. I am in a similar boat – plenty of my clients never ask for invoices, and so I generate them and store them for the Finanzamt and for bookkeeping. If a client asks for an invoice from 6 months ago when they’re doing their own tax, this is never a problem. As for the invoice numbering system, you have some flexibility there. As long as it’s logical, you can generate different codes for different clients if you want. You can also change your numbering system once per year. –Kathleen
Hi, Kathleen,
Thank you for your quick reply.
You mentioned, “generate and store them”. Do you mean, I generate them just for my own, but don’t have to send them to the clients?
Thank you very much for your help.
Hi,
I hope you don’t mind me leaving a message as I’m not a freelancer. I have recently moved to Germany and am employed, although I have been a freelancer in England before.
My company here is pedantic about the invoices I give to them for my travel expenses, especially if they are from a German company. The main problem seems to be if my name is before the Company’s name on the invoice. All the advice I can find in English simply states that the recipient must be included on the invoice. Although I was personally the recipient it is the company that will be claiming it as a valid expense. In this case I paid postage for an item with DHL (€35), the receipt says
Chris the Brit
Business GmbH
Hauptstrasse 1
Germany
Is my company correct in refusing to accept it and it must instead state:
Business GmbH
Chris the Brit
Hauptstrasse 1
Germany
Thanks in advance,
Chris
hi Chris the Brit,
I have to say, I am a bit stumped by this one. I really don’t know. I think a tax advisor would be the right person to ask. Or if you have legal insurance, you could call the hotline and ask that sort of a question as part of your membership. But if you do find out, let me know! Cheers, Kathleen
Hi Kathleen,
I have a question regarding the invoice number. In you exemple at the end of the year or month there would still be a gap between 2017-KP-9999 (or 2017-KP-6453 if the person didn’t send 9999 invoice to that client in the year) and 2018-KP-0001, so would it be ok ? Or should the number always follow each other ?
I have some trouble thinking of a number that could include the date, name of client and also follow each other through change of month/year..
Thank you for your help.
Kim.
I think it would be fine. Let’s say your invoices were just regular numbers and not separated for each client, e.g. 2019001, 2019002 up to 2019657, your last invoice for the year. There would still be a gap between 2019657 and 2020001. The same would apply if you have separate invoicing for separate clients. Your last invoice for that particular client is never going to be 9999. That would be a crazy coincidence. Does that help?
Good evening,
I’m running a new consulting
Company in Germany. I’m British, lived here for 11 years. Going it alone now since 8 months. Here’s what I understood thus far on the invoicing requirements:
Invoicing for Services Provided
1. German Customer: Add 19% VAT
2. Non German customer that is based in the EU – reverse charge VAT scheme so no VAT added to the invoice. Customers VAT number to be added to the invoice together with a statement confirming the return charge VAT scheme.
3. Invoicing a non German or EU customer: no VAT added to the invoice.
And now comes the complicated part: Invoicing for expenses
Invoicing a customer for expenses that have been agreed in the contract: e.g: flights, hotels, taxis, trains and meals.
Do I:
– 1:1 charge with no VAT added
– 7% or 19% VAT added on top of the expense paid.
– Reduction of the expense based on the value you get back from the Finanzamt and then add the 7% or 19% to the invoice.
– Why does a flight you book have no VAT in the ticket but a train does? Where are the rules documented? It seems to be different depending on who you speak too!
2. Should services provided be on a seperate invoice to expenses if within the same contractual agreement?
The invoicing of expenses seems to be complicated!
Any advice appreciated.
Best regards from Frankfurt.
James
Hi James,
I’m so sorry, you’d have to talk to a tax advisor about how to do that – not in my sphere of expertise!
Please feel free to update if you find the answers – I’d be very curious.
Hello, Sometimes for saving time issues I prefer to pay before I have been sent an invoice. In that case the clause of “You have upto 14 days to pay this invoice” doesn’t count because it has been already paid. How do you add a sentences that acerves that it has already been paid and the date of payment in an invoice that comes after the payment?
Thanks in advance.
Vorkasse erhalten am (date). I do this on about 90% of my invoices because people pay online and I generate a lot of invoices after the fact.
Hello there,
I am a freelancer in Berlin, and just made my very first invoice using my ID nummer & also accidentally charged VAT – I don’t have steurnummer yet but I will be going to Finanzamt tomorrow to apply for one.
My client has already paid me (including VAT that I accidentally charged). What should I do now? It doesn’t seem as simple as just refunding the VAT money to my client or issuing a credit…I’m so new to this and I just hope Finanzamt won’t hassle me with a fine or anything!
Please let me know, thanks a lot!
I’m sure this has resolved itself in the meantime, but I’ll answer for the benefit of others. Just re-issue the invoice with the correct Steuernummer on it once you get it, and yes, refund the VAT to your client. It happens all the time. You are allowed to make mistakes, even in Germany 🙂
Dear Kathleen,
I’m having some issues with my invoices as a freelancer.
First of all, the clients made templates for the invoices that I need to fill in at the end of the month. And each of us keeps one copy. And I thought I could keep it as an invoice for the German taxes. But should I also include for the taxes one invoice that I make myself more specific ? And then send it back to the clients ?
Secondly, I have a steuernummer since 8 months, before that, I thought that I needed the identifikajon nummer… no one said anything til one time and I did it right after. Nevertheless I have 5 months of invoices which are not with the steuernummer …
should I included it them and correct the steuernummer and number and sent it back to the clients or just ignore it? Or just correct for the taxes ?
Thank you in advance!
Hi Laura
As long as the invoice template includes all the necessary information, you can use it, but you don’t have to use it, especially if it’s not specific enough or generates a number that doesn’t suit your invoice number system.
Ask your tax advisor if they think it is necessary to rewrite the invoices you issued to clients with the Steuer-ID-Nummer on them, or whether they can declare the error an easier way. Your tax advisor might say it’s necessary to make things compliant, or they might say not to worry about it or it’s too late. It gets trickier if this is something that happened a long time ago because your clients will have since closed off their bookkeeping for that period. I’ve had service providers re-send me invoices before because something was incorrect, but usually within the same accounting period. So.. I’m not quite sure what the right thing to do here is. My gut feeling tells me you should rewrite the invoices for your own books. -Kathleen
Hello Kathleen,
I have a freelance visa in Germany and registered as freiberufler at finanzamt to get my freelance tax id.
I got an offer to work as a software developer for a client in Germany through a consultancy registered in UK.
So basically every month I have to send invoice to the UK based consultancy for my services at the client here in germany.
– In the invoice should I add VAT (19%) on top of the total amount?
– I sent a sample invoice with VAT , but they said to rename it to ‘Reverse Charge’ because am invoicing a . UK based consultancy.
– If I have to mention Reverse charge then is it also same as 19% in additional to total amount ?
Looking forward for your advice.
Thanks in advance,
Tarun
– Don’t add VAT
– Mention Reverse Charge VAT §3a (2) UStG, plus your VAT ID No. (starts with DE) and the company’s VAT ID number (starts with GB)
– leave out VAT altogether. Just your net fee.
Hello Kathleen,
Thanks for providing the valuable information. Although I have few question regarding my situation here.
I am a non-EU citizen and hold a dependent BlueCard, my husband holds a BlueCard and has a permanent contract.
I am Germany for a year and searching for a job. Recently I have got an opportunity to work as Online Marketing Manager but the company wants to work me a as a freelancer for 2-3 months before they go with a permanent contract.
I have never worked as freelancer before and never registered in Germany as freelancer as well.
So I had to create my first invoice for my client and due to lack of knowledge I filled Identifikationsnummer in the invoice instead of Steuernummer, which I anyways do not have currently. I have received a payment for 15 days already. Now post realising the mistake I am not getting what should I do. And being this freelancing opportunity is a temporary thing and I wont be earning more than 3000Euros in 3months, do I have to register myself as freelancer in Germany? Is it illegal not to register as a freelancer and work in Germany? Please suggest what should I do in this case.
Hi Dan, as a dependant of a blue card holder, you should have free access to the job market, so that’s not an issue. Have a look and see if your permit says “Erwerbstätigkeit gestattet” – it should. You do have to register as a freelancer with the tax office, and once you do that, you’ll get a tax number that you can put on your invoices. You’re not supposed to send invoices out until you get that number. But if your client was kind enough to pay you, well, lucky you! Just wait for the freelance tax number to arrive and send an amended invoice to the client, dated whenever you actually do send it with a note on the bottom saying “Vorkasse erhalten am (date that your client actually paid you). Just say to the client “sorry, I made a mistake, here’s an updated invoice.” Not a big deal, easy fixed. If you want more help with this stuff, I’d be very happy to give you a coaching.
Hi Kathleen,
First of all thanks a lot for detailed information on your blog. Its certainly helpful for freelancers like myself. I have question if you don’t mind answering them. I am about to launch a P2P marketplace platform like blablacar. The transactions are in range of 5€ till 100€. I would charge one party and send money to other after completion of order and in between charge a small commision. I didnot opted for VAT while filling tax form.
– In my case, do i need to make invoices for customers ?
– If yes, shall i use the steps of invoice<250€ from your blog ?
– is it necessary to mention commision in the invoice ? (actually the commision is charged based on an algorithm in backend)
Looking forward for your answer 🙂
Have a great day!
Best regrads,
Anastasiia Havrylova
Hi Anastasiia,
These sound like questions for a tax advisor. Here’s a list of English speaking tax advisors in Berlin.
Hello thank you for this great article and for answering everyone’s question here in the comments.
I have a quick question regarding my invoices prior to when i received my stuernummer and VAT number. I wasn’t aware i needed this number at all or even needed it on my invoices. So i have a bout 6 months worth of invoices that don’t have this information but i do have the article section declaration that i do not need to charge vat.
So my question is do i resend these invoices with my stuernummer now that i have it? would i be then cancelling the original invoice and reissuing them a new one with a new invoice number and everything?
thanks in advance for all you help!
I would redo these invoices with the correct details on them. You don’t have to change the invoice numbers, and if you don’t think your clients need correct invoices (e.g. they can’t claim your services as business expenses) then you don’t even need to re-send them to your clients, just have them for your records. But if your clients are German businesses, they will probably be grateful for the corrected invoices because if they receive incorrect invoices, the Finanzamt can sometimes give them trouble about trying to claim your services as business expenses. In fact, German companies are usually really pedantic and make sure that your invoices are correct before they will even pay you. Nice that they paid you despite this. Have fun rewriting invoices (we’ve all been there).
Thank you so much for the great advice! I guess it’s all apart of the learning curve of working in a new country. Great site full of amazing advice, really appreciate all your work!
Hello Kathleen,
Thank you so much for the article. It is really helpful 🙂
I still have a question though. I just got my Steuernummer for freelancer translation. I just sent my first invoice without VAT. But when I started the process I received the letter from ELSTER saying that I need to make a payment until the 10th of every month. Is this applied for my situation also? The service was less than 100 euros. I believe that I don’t need, but I want to it right. Could you help me with this information?
Thanks in advance. Looking forward to hearing from you.
Bruna
I don’t know what type of payment the Finanzamt wants from you by the 10th of every month, but I suspect it might be VAT. Which means you might not have filled out the form correctly or you predict more than 22,000 EUR of income per year. If you think this is what happened, you should contact the Finanzamt and see if you can correct the mistake. If you have a tax advisor, get them to handle it. If you want help communicating with the tax office in German (either by phone or email), feel free to book an hour of Life Admin. Good luck!
Hi Kathleen,
Thank you for the article and the great replies to everyone’s questions.
I have started working as a freelancer, initially with a French company as a client. I applied for a tax number and VAT ID number almost two months back, and I still haven’t received them. All I have received so far is an Einkommensteuernummer, and the Finanzamt says that the VAT ID number will be processed by the Federal Tax Office, to whom they have forwarded my application.
Can I invoice the French clients without a VAT ID number? I understand that it’s possible to do this with the Steuernummer within Germany, but does it also apply for VAT ID number for EU companies? I know I simply mention that there is no VAT charged due to reverse charge. The client is also okay with me invoicing now without it, and I send them a corrected invoice whenever I receive the VAT ID number.
Thanks in advance for your response!
I’d do that if the client is OK with it – invoice them now and send them a corrected version when you get the VAT ID number. Sounds like a decent solution.
Hi Kathleen,
Your blog is very useful. Hopefully you may be able to read my questions soon. 🙂
I have a couple of questions about Scheinselbstständigkeit:
1. Due to business requirements, the client requires freelancers to travel, and the travel cost will be paid by client. Is this legal in the contract?
2. If the travel is required by Client, is it legally for Travelling time of freelancer is considered as partly Service, and the travelling time will be compensated by 50%, meaning 0.5 multiplied by the hourly rate,
2. Is freelancer always paid by hourly rate, isn’t it?
3. Will be legally to ask freelancer to follow the Information Security Guidance of Client, who is sub-contracted with a Consultancy Company?
4. Instead of not writing specification of exact service time (from 9:00 to 11:00 on 03.03.2021) tracking monthly, is it enough that freelancer list service hours at that day (e.g. 2hours on 03.03.2021)?
5. Is it legally that Clients sign the monthly service “timesheet” of freelancer?
looking forward to receiving your reply soon.
Rong
1. Fantastic. Fine. Why wouldn’t it be?
2. Whatever you negotiate with your client is your business. You’re a freelancer – you can name your own terms or you can choose to accept or reject their terms.
3. No. Freelancers get paid in all sorts of different ways, per hour, per task, per project, retainer, you name it.
4. I think you’re talking about signing a DPA (data protection addendum)? Yes it’s normal to have to sign one of these, or give your client your own version.
5. How you write your invoices and describe your services is up to you. Some clients want you to specify exact hours, others couldn’t care less. But writing “2 hours” instead of writing the specific times is sufficient for the tax office, yes.
6. Some agencies need timesheets, yes, and some require a sign off before they pay out. But if you’re billing them for certain hours and they are not signing off on those hours even though that’s what you did, then that’s not so cool. It sounds like you’ve picked up some work with a large-scale agency like GULP or similar! if it is GULP, I’ve worked for them before and they’ve been very good to me.
Hi Kathleen, thank you for the info!
When writing an invoice to my clients (asking for my pay) do I have to include their Steuernummer as well as mine?
Thank you!
Hello Kathleen,
I am truly grateful for all these precious informations you provide, chapeau bas.
I have a question towards the point 2 of your post, precisely: „You might be charging 7% VAT because you’ve granted copyright to a client for your intellectual property. You might be doing reverse charge VAT for a client within the EU…”.
I am fresh Freiberufler, non-VAT payer but with VAT ID number for the transactions with other EU countries. I’m about writing my first bill for abroad client from EU, selling my artwork for 600€. The client is a private person, not a bussiness owner. They have VAT ID number as everyone does in their country. And here I hope that the 7% VAT stays on my side not on the client’s? I’ll be very grateful for your answer or redirecting me where to read/learn more about it, where can I find the proper clause to quote in the bill. Thank you in advance and looking forward to hear your opinion.
If you’re a non-VAT-payer (e.g. a Kleinunternehmer) I can’t think of why you should have to worry about charging any VAT on your invoices, even if you have a VAT ID number.
Hi Kathleen,
My husband and I truly value the advice and translator services you and your team provide! They definitely have helped us settle in to Berlin.
We are currently struggling with social security, and where/how to contribute as Americans (not wanting to be double taxed – especially with freelance income). The DRV has not been easy to communicate with or get answers from. Do you happen to have any recommendations for someone who could assist with this, who also perhaps could advise on tax situations? We’ve been working with a Steuerberater who unfortunately is now MIA.
Thank you in advance.
Kelly
Sorry to hear that… tax advisors in Germany tend to have a habit of going AWOL from time to time. Try Küpper & Kollegen if you haven’t already?