Despite the VAT exemption, an invoice is mandatory. Under certain conditions a tax exemption can be granted according to 4 UStG. This can be obtained, for example, on intra-community deliveries. Sales from aviation and shipping are also not subject to sales tax.
According to 6a UStG, an intra-community delivery exists if the goods were transported to a community area. However, the buyer must be an entrepreneur who bought the product for his company.
Sales from aviation and shipping are tax-free
- The same applies, for example, to the delivery of gold to the central banks.
- Non-profit associations and organizations can apply for a tax refund. However, the goods must be delivered to a third country area and used locally for charitable, humanitarian or educational purposes.
- A tax must also have been incurred and this must be shown separately on the invoice. The application must be submitted using an officially prescribed form.
- According to Section 12 (2) UStG, only seven% sales tax is charged on some sales. This mainly includes staple foods.
Obligations of the entrepreneur
The sales tax law results in various obligations for the entrepreneur. According to 14 UStG, he must issue and keep an invoice and a copy for each product. The use of the sales tax calculator is essential in this case.
The authenticity of the origin of the invoice, the integrity of its content and its legibility must be guaranteed. Authenticity of origin means the security of the identity of the biller. Integrity of the content means that the information required by this law has not been changed, every entrepreneur determines how the authenticity of the origin, the integrity of the content and the legibility of the invoice are guaranteed.
The retailer is also obliged to introduce internal control mechanisms in order to be able to trace the progress of the goods and the invoicing. The invoice can be sent in paper form or electronically.
Sales tax is largely the same across Europe
The invoice must contain the following information:
- Full name and address of the company and the recipient
- The company’s tax number or sales tax identification number
- Date of issue
- Invoice number (consecutive number that is only assigned once)
- Quantity and type of delivery
Time of delivery
- Charges broken down by tax rates and tax exemptions
- Applicable tax rate, tax amount due on the consideration
- If applicable, reference to the retention obligation
There is also a ten-year retention period for all invoices. The period begins at the end of the calendar year in which these were issued. During the entire period, the invoice must be intact and meet the further requirements of 14 UStG.