State provides bureaucratic relief
In Germany, as is well known, there is a separate law for every purpose, for every life situation. This also applies to relieving and purifying everyday office life. The current legal basis for this is the “Second Act to Relieve Bureaucracy of Small and Medium-Sized Businesses in Particular”, in the short version the Bureaucracy Relief Act II, BEG II for short. The detailed title of the BEG makes it clear what is to be achieved with it; a noticeable relief of daily bureaucracy.
Upper limit for small-value invoices raised from 150 to 250 euros
One of the innovations in BEG II, which will come into force retroactively as of 1 January 2017, is the increase in the upper limit for small-value invoices. It is now 250 euros instead of 150 euros. Small-value invoices are generally any invoice documents whose total amount, i.e. including the applicable statutory value added tax, does not exceed the sum of 150 and now 250 euros. The helpful relief lies in the simplified recording obligations under the Value Added Tax Act (UStG). First and foremost, the creditor of the invoice is relieved; i.e. the one who has provided the service and is now invoicing.
Invoice with mandatory information is sufficient
All necessary information for the individual invoice is listed exhaustively in § 14 UStG. The bureaucratic relief is made clear in § 33 UStDV, the VAT Implementation Ordinance. According to the significantly simplified rules there, the following contents are sufficient for a small amount calculation:
- the full name and address of the company providing the service
- the date of issue of the invoice
- the nature and quantity of the goods delivered or the scope and nature of the other service provided
- the remuneration and the amount of VAT attributable thereto in one sum
- the applicable tax rate or, in the case of tax exemption, an indication thereof
In contrast to the complete invoice, information on the tax and invoice number, the recipient of the service and the date of service provision can be dispensed with. If small-value invoices nevertheless contain such additional information, then they should be correct, otherwise the input VAT deduction is threatened.
Previous formalities and pitfalls continue to apply
For the small-value invoices themselves, nothing has changed except for an increase in the upper limit. Both invoice issuers and invoice recipients must therefore continue to pay attention to the correct form and content. An incorrectly issued low-value invoice is not automatically a formally correct invoice according to sec. 14 of the German VAT Act. If the low-value invoice does not meet the requirements of sec. 33 of the German VAT Implementing Regulation, the input VAT deduction of the recipient of the service is jeopardized by the fact that the tax office objects to the low-value invoice as incomplete.
Small-value invoices will not be applicable in the future either
- for mail-order invoices [sec. 3c UStG]
- in the case of intra-Community supplies [sec. 6a of the German VAT Act]
- in the event of reversal of the tax liability in accordance with sec. 13b of the German VAT Act
Do you have any questions about accounts payable and this innovation in BEG II? We look forward to your comments.
Image Credit: Fotolia.com, Photographer: Daniel Ernst
