How to invoice a company

I quit my job a few months back (yay!!) , and recently noticed a bonus I was due had not been paid. I asked about it, and they said I am no longer on the books, so I would have to invoice them. I would not know where to start "invoicing" somebody back in the UK, let alone here.

Clearly, they were hoping I would just forget about my bonus, and as a foreigner, would probably have no idea on the legality or not of German companies withholding funds.

To invoice somebody, don't I need to be a corporate entity, IE registered as self employed or something?

This all seems highly, highly irregular to me. Why did they take me off the books when they still owed me money, unless they were simply hoping I would forget and go away.

Any advice or ideas very welcome. Currently, all I have come up with involves his close family and ideas from Cape Fear. Probably ill advised.

Hiya, you've not necessarily been screwed.
Just type out an invoice and sent it to them, see what happens. At our place it's the same - once an emp is off the books it's really complicated to set them back up, you can't just put them back on for a one-time payment. So if we forgot to pay them something we owed them, then we would ask them to just invoice us, as well. They will just need something to put on their books to prove to the auditors that they paid out for services received.
Not sure where it would fit in on your Steuererklärung, though. If you are organised enough you could ask your tax advisor if you've got one, I suppose.
Topsy

Well, that is actually not true. It is simple for a company to pay out the bonus. And yes, you can´t issue an invoice if you are not self-employed. You did gett crewed by you boss and there are many ways to make it good. First, check your employment agreement (contract). Is the bonus mantioned in the contract. If I were you, I would write them a letter first (Mahnung) with a set day to pay it. If they do not do that. You can go to Arbeitsgericht, Winzererstraße 104 (Nordbad) and sue them. You won´t have to pay for anything because it is a free service for "screwed Arbeitnehmer" or get a lawyer...

i know at my old company, if we got a bonus, we had to stay on at least another 3 months or have to payback the bonus once we left. but if they say, send us a bill, then what have you got to lose? give it try. i wouldn't hold my breath though.

oh, and good morning!

Invoices are easy-peasy lemon-squeezy if you have a template to work with:

invoice_template.doc

This template is written in English but it adheres to all the various German tax regulations - just translate the relevant bits if you need to.

The important bit is to include your tax number. Otherwise it's pretty straightforward.

Thanks peeps.

They are certainly trying to screw me. Another guy left at the same time as me, and had no problems with payment, but he did get a lawyer involved
The bonus IS in my contract, and basically they were hoping I would not ask for it. What on earth should I write on an invoice?!?!

Title: Give me the money you owe me

I am not really invoicing them for anything, its more like purely collecting a debt. I should be charging them 4 points a week interest FFS.
Additionally, we signed an agreement that I would be on their books as an employee until the end of september, yet I got a letter from my insurance company in August saying that they had recieved notice that my employment status had changed. Not 100% legal apparently.
Whatever happens, I gotta find a nice way to repay my ex-boss for this inconvenience, but I'll bide my time

La Vendetta e un piatto che si serve freddo.

Maybe natasa is more right than I am - she probably is, in fact.
I was just thinking like a finance person (which kind of figures, since I am one ), and I know that I would want to pay you money if we owed you money, but at the same time I would need some kind of proof that the payment that gets made has some kind of basis (because of auditors, Sarbanes Oxley, all that stuff).

But if you just write them a Mahnung, as natasa says, with the deadline thing in there, then that should be enough. If they don't pay you after that, then you are right, they are evil.

if you need a good lawyer a friend of mein is fachanwalt für arbeits- and steuer recht. pm me mate if it gets to hairy, complicated and you need serious help.

Natasa is not right.

I am a private person and I write invoices to German, USA, and English companies. I do have a MWST number so I can write MWST less invoices abroad but Don does not even need one of those.

He does not need a Gewerebeschein, nor does he need to be a company. And I have had arguments with the Auslanderamt about whether I need a Gewerebeschein.

Here is one of my German invoices. Don can modify it to suit his needs. You need to choose a Rechnung number, and these rechnung numbers must be unique across every invoice you write in Germany for the rest of your life. So 1 is a good number to start with.

But never duplicate an invoice number. The Finanzamt does not like it.

Oh, and you pass the invoice onto your Steurberater, ONCE it has been paid.

Rechnung 04301
Steuernummer xxx/xxxxx

Ahlers EDV Systeme GmbH
Attn: Hr. Ahlers
Mozartstr 23
85368 Moosburg
Germany

Hiermit berechne ich Ihnen

icePROM Provision Euro 2398.50

MWST @ 16% Euro 383.76

Gesamt Euro 2782.26

Please transfer the above amount into my account:

Bank
Number
BLZ

What are you doing guys... You are confusing her totaly... You CAN`T and DON´T write an invoice as not self-employed person... it is ILLEGAL... MadAxe... you have a MWSt-Nr. and you CAN write an invoice but if she is not self-employed (and it doesn´t mean Gewerbeschein) she can´t have the MWSt Nr. So the only way is to go to KVR and make her visum change in self-employed or actually to get the permit to be self-employed and the to Finanzamt and get her MWSt Nr. and then she can issue an invoice... Do not play with Finanzamt here - they are going to be very very mean and bad

Nonsense. You do not have to charge MwSt. if you are making below a certain amount of money. As Don Riina will be only sending out one invoice, it's unlikely he will be making over the amount from this "freelance" project. The person you are invoicing needs your tax number to make it official and I'm sure DR has one of those. He may be taxed differently on this one invoice than he was when he was an employee, but I don't see how it is illegal.

Natasa,

Unless there is a law that I don't know about that dictates that an angestellter cannot write invoices as a freiberüfler then you are plain wrong.

Is there such a law?
I find it unlikely because how does the computer engineer working at BMW legally doing some software consulting for another company actually invoice?

I used to write invoices without my Steur number on them, but that German company told me to start doing so about 1 year ago. New rules from the Finanzamt

She doesn´t have to charge MWSt to certain amout of money made in a year but in that case she needs Freibetragsbescheinigung from Finanzamt...

And trust me guys because I know what I am talking about (I work in the tax department of a Law Firm). We are not Germans here to have some certain privilages (and even they have to have these things)... Go or call Finanzamt and ask them. They will be able to help you.

Ok to make it official - I have just asked my boss (who is Tax attorney) and if the company wants to claim her services on their taxes... then it has to be an official invoice with the Steuernummer (and she has to get this Steuernr. from Finanzamt). And there is no such thing as taken off the payroll and it is hard to get her in...in Germany. If they owe her money - they have to pay it... So I think the end of discussion...They are trying to screw you up

Natasa,

I do not trust you. Your advice is always delivered in a semi-hysterical tone, with no backup, and no citing rules.

On the off chance I was wrong I asked you a direct question, which you just ignored, to tell us you work in the tax department of a Law Firm.

So I will repeat my question

Is there such a law that dictates that an angestellter cannot write invoices as a freiberüfler ?

Natasa,

You also stated that it is no problem for a company to pay the bonus once the employee is off the payroll.

If this is not a legal issue, then it is a payroll administration issue. and if the payroll software/system is incapable of handling this task it cannot be done. And if you do not know which payroll system Don's ex employer is using you are completely of incapable of judging its capabilities.

Don has a much better chance of getting the money if he remains friuendly, and he should only threathen them if they refuse to pay his invoice.

Assuming they are hostile on the evidence you have presented is just plain stupid.

Ok I just spoke to my boss again... First of all there is a law about something like that.

As Angestellter you can issue an invoice for some other works non-related to the work you do in the company. For example I work for my company as Rechtsanwaltsfachangestellte and they want me to translate something. Then I can issue them an invoice for the translation work. On the other side, she has to have this self-employment permit in her passport.

What he thinks is , that the company doesn´t know what they are doing (or wheather she has this self-employment thing or not) or they don´t want to pay.

His last words were (of course the lawyers always say that) KLAGEN; KLAGEN; KLAGEN...

And MadAxe I don´t know what makes you think that everrything is in "semi-hysterical tone"... It is up to you guys to do whatever you want to do, but I am just advising you not to do the wrong thing. I guess I will stop doing that

We are not doing "whatever we want to do", we are advising based on our own experience of invoicing people. How many times have you personally invoiced someone? As for her self-employment permit, Don Riina is 1. MALE and 2. an EU citizen, so that is irrelevant. Basically, your boss has just confirmed what the rest of us were saying: Send an invoice and see what happens.

I had to write a couple of personal invoices for some work I did outside the company but didnt have the right sort of tax number and wasnt (couldnt) charge for MwSt anyway. The client told me that without a tax number any invoice or bill is basically useless. I went in to the finanzamt to ask about it and they reacted as if I had asked them whats the best way to overthrow the government, they flapped their arms about and told me I was not allowed to work self employed (it wasnt even self-employment it was just a one off parts and labor thing for a friend of my bosses), and probably shouldnt be writing invoices if I want to avoid any legal problems and until I know what I am doing.

Now I just do it through work or keep it cash, and I suggest you do the same. Apparently sometime this year the Finanzamt introduced some complicated new tax rules etc... Basically sending out invoices could be a legal trap unless you know exactly what you are doing.

But you can just send them a letter asking nicely for your money by a certain time.
That's not really an invoice, is it? - I can't imagine it's a criminal offence to send someone a letter asking them politely to pay them the money they owe you.
Flippin 'eck

First of all I am sorry that I didn´t know if Don is male or female and for the fact that he is a EU-citizen. It does make difference and he can do the self-employment thing. And I am awfully sorry to be (as I can see I am) a pain in the ass for giving you guys some sort of advise (and I can give you good advise since I have a legal background and do these kind of things all the time). And I have issued a tons of invoices @ showem but I do have a little company running (and the are all legal) and what can I say Kza confirmed EVERYTHING I said. So if you guys want to issue invoices go ahead...nobody is keeping you from that...but remember WE ARE NOT GODS TO DO WHAT WE WANT TO DO... There IS a different legal system in Germany as in Canada or US - I am sorry about that but I do not make laws

@Topsy Yes but the recipient of that "letter" wont be able to use it as an invoice when it comes to accounting, tax reporting etc. Assuming the amount is supposed to be paid, eventually a proper invoice will be needed to prevent a black hole appearing on the books. A black hole that the finanzamt , accountant, shareholders etc wont consider filled with an informal letter.

They are VERY formal here, particularly since this years tax rule changes.

The tax rules change boil down to a few very simple things:

Every invoice must have a tax number on them.
Every invoice must list when said service was performed.
Every invoice must have an individual invoice number and if you are sending out more than one invoice, they must be in consecutive order and you have to keep a list of them.

That's hardly a problem for Don to include. Kza's case could be different since he's a Kiwi. That or they recognised that he really was trying to overthrow the govt.

.. and just for the record you don't need to be (registered as) self employed to write an invoice. There is only a "Gewerbenameldungspflicht" if your are actually *running* a business (with profit or loss). If you are just writing a single bill (as in this case), effectively as a reciept for money paid, then so long as it has the correct data as shown before (and since July 1st the Steuernummer is an absolute must) then it's no problem. Of course, you will also have to declare this income in your tax return.

And just for the further (amusing) record there are certain businesses that do not need to be registered - prostitution, and brothel ownership to name but two. These are considered to be "sozial unwertige Betätigungen" for which registration is not required

YL6

Doctors and programmers also don't have to register as a "Gewerbe". Basically you have to show that you are producing something "Geistlich" (ie. doing intellectual work) and not trading. So you can design/write/test software, but you can't sell computers for profit, otherwise you have to register as a Gewerbe and pay Gewerbesteuer. This was what I was advised and it seemed to work.

Of course this is a separate issue to MWSt.

Natasa,

Yes you were being a pain in the ass, but thanks for realizing it. There is nothing wrong with not knowing that Don is a male, but assuming he was not an EU citizen, and then screaming that he would go to jail, was wrong.

Since it all seems to hinge on EU citizinship, that is the first question you should have asked before you gave any advice at all.

Writing invoices has nothing whatsoever to do with EU citizenship (except of course, that Americans who write invoices, probably can't write - but that's a whole new can of worms... )

YL6

Small update:

I have had a fair few conflicting pieces of advice on this. Opening a brothel sounds like the best way forward.
Anyhoo,
I asked the company what the score was, and was told this

"This invoice should contain
a) my address
Company address
c) subject - I would prefer "Professional Services rendered in month xxx"
d) total amount and importantly; NO VAT

As the company is going to remit the full amount to your bank account and the payment is subject to German income tax, it will be your job to take care for it. This can be done by the end of the year when submitting your next "Einkommensteuererklärung" to German tax authorities. Beside you normal declaration for "Einkommen aus nicht-selbständiger Tätigkeit" you should declare this payment as "Einkommen aus selbständiger Tätigkeit". "

Not even a mention of any tax number or anything. Hmmm. I'm gonna use NCC-1701-A as the reference number because I am in a geeky mood this morning.

Looks like I'll get the money whatever, and if I just put 50% of it away for the krout goverment to steal from me next year, I cannot envisage a problem really.

That should be fine - offically the tax number is also required, but this is something your "customer" (the company) should be more bothered abut than you. This number is used to back-check if they get a tax-office inspection.

YL6

Just be careful, because without the tax number, they really don't have to pay you. They can if they want to and probably/hopefully will, but without a tax number they have an excuse not to pay it. In which case, you send them the same bill, this time with your tax number popped up on it.

I agree, but they've not asked for it and seem willing to pay in any case...

YL6

I have now had my invoices refused by 2 different companies. Actually they refuse my request to invoice them and demand my lohnsteuerkarte. It surprises me a bit consdering these are TV companies and should be well used to getting invoiced from freelancers. Anyway, I have a problem because I worked for both companies through contacts who helped me out so I can't really get too arsey with them. It's the buchhalters that are the stubborn ones and I have no direct contact with them. I am registered freier mitarbeiter but still have my lohnsteuetkarte. Does anyone know how sending them the lohnsteuer thing will affect my accounts, how much tax I pay( and which taxes I pay) and my PRIVATE health insurance?

Thanks in advance.
-----------------------

Another thing...how come this even comes up? What's wrong with the freelance sector here?

The dude that asked the other lohnsteuer question got a LOAD of answers...So i know there are 'experts' out there...please?

There are MASSIVE tax-avoidance issues in the media industries at the moment. Your "customers" are simply playing safe and protecting themselves. In principal they are going to put you on their payroll, albeit temporally and deduct standard tax at source. Too many companies have been caught out by hooky freelancers. Following an inspection of their accounts the tax authorities go checking that the freelancer whose bill was paid also declared the tax, then finding that "Herr Micky Maus", as on the invoice never really existed. They then go back to the film company, or whoever, and simply take the missing tax from them. It's the same thing with foreigners (e.g. actors) working in media here - German companies are now required to deduct income tax prior to paying their invoices, then let the artiste take care of claiming it back (if they are entitled to it).

It should not make any long term difference to you as a bona-fide freelancer, except that you paid the tax somewhat early. At the end of the year if you have overpaid it will be returned in the year roll-up.

I thought it would affect my health insurance as it used to be that you couldn't have that unless you earned a certain amount (as a lohnsteuerkarter...).

Also, surely thats not true that they audit every freelancer they find when they audit a company...surely that's not possible? and SURELY they can't then claim the tax off the company, where's the legality in that? I'm not calling you a liar, it just shocks me!

Anyway, this kind of suspicion of freelancers and 'playing safe' as you put it is what makes the TV industry in Germany (or what I've experienced of it so far.) as shite and stagnant as it is. The other thing of course is the exploitation of praktikants, that's rampant here, but also another story...

Thanks for the help anyway.
-----

I've experienced a tax audit where they noted the name of EVERY freelancer or apparent freelancer in the company receipts. These names are fed into a database to look for black sheep and in some cases they re-visit to photocopy invoices for deeper checking. It is the companies responsibility to check that invoices and freelance work are legally provided, if not they can be responsible if MwSt is not paid or taxable income is not declared. Checking this is onerous. Taking the safe route and deducting standard tax is easy. But to your detriment, of course.

youch...well, at least they pay you your rebates pretty quickly when you ask...in England i waited 3 yrs!

Your bill should not only contain your tax number (Steuernummer) but also your tax office( e.g. Finanzamt München) , this has been a legal requirement for some time now if my memory serves me correctly.

Hi hi,

I am doing some work for a company on the weekends in March. And they'd asked me for my VAT number. Now as I am not my own company I don't have one. But do I invoice them with something like the file attached here ?

What should I do about a VAT Number ? Should I invoice them with VAT and hold on to the extra mulla ? Or just not charge the VAT ? I think I heard that the limit to reg for VAT was 6,000 EUR. Or do I hold on to the VAT and give it to my tax man at the end of the year ?

It's possible that I will be doing more work, so I will eventually over the 6k EUR/year, so should I just register for VAT now?

regards,
f

If you are not registered for VAT then you don't have a VAT number and don't need to (in fact legally can't) charge it. VAT registration is voluntary unless your turnover is over a certain amount. It might be they simply want your tax number (Steuernummer) as detailed in previous postings, which is a requirement on any invoice

Thanks YL6.

Any use in reg'ing for VAT, in case I earn over the voluntary value ? I will try and call my tax man and see what the value is, I guess he should know.

You MUST register for VAT if you expect to have a gross turnover of more than €17,500 in your founding year, OR you had turnover less than €17,500 in the previous year and expect more than €50,000 in the current year. Otherwise registration is voluntary, but for most people is recommended. It does mean more monthly paperwork but at the same time you effectively save 19% on anything you buy for the business.

If you earned €17,500 (turnover, not profit) or more in your previous fiscal year, then you must register for VAT in the next year.

As people have said, stay below this threshold and it is a voluntary registration.
This can have benefits in claiming back VAT on many business-related purchases. But you have to judge the benefits for yourself.

I have a small business and will possibly exceed the threshold this year or most certainly next year, but the problem I have is stock carried forward from the previous year which I have paid VAT on, but haven't been able to claim back. I have been asking my tax consultant if there is a way I can claim back the VAT for carried-over stock from a non-VAT registered to a VAT registered year.
Fortunately, she has just informed me that there is a way to do this.

So I may register sooner rather than later.

Also, in your first 3 (or is it 5?) years of being VAT registered you MUST submit VAT calculations to the Finanzamt on a monthly basis. After this initial period, it is (I believe) every 3 months.
MT

Thanks for the tips folks.

Time to send my "very first real proper invoice" !

if you are planning on registering for VAT, then you can include VAT on invoices prior to registration, but clearly you must submit the necessary forms for declaration immediately following registration, latest at the end of the month. And of course, you can immediately start claiming it back on business expenses.

I've ended up in a similar position to false above and have done some work for a friend's company without contract and he now wants to pay me (nice chap!) and says he needs an invoice. I take it from this thread that I can just write 'Invoice No. 1' on a bit of paper with today's date, my name, address, personal steuernummer from my friendly finanzamt (I don't have any company, so no other tax number), ignore any MWST and just write the amount owed and my bank details, the reason for the invoice with dates of the work and slap it in the post to him and all this is legal. Then I just put this on my tax return at the year end and I'm all square with the finanzamt. Can someone who knows just confirm that hasn't changed in the last year and my understanding is more or less correct? Thanks.

Hello,

Nice topic. I now have to issue invoices myself and this info was very helpful.

One more question: I recently received from the Bundeskanzleramt für Steuern a "Persönliche Identifikationsnummer" (more info at www.indentifikationsmerkmal.de), which as I understood should be used to declare taxes and stuff. My question is: can I (or should I) use this number to emit invoices? This is the same as a Steuernummer I would get at the Finanzamt?

Another quick question: I have a student visa which allows me to work 20h/week. I am doing some extra work which requires me to emit invoices. As a student, are the regulations any different then all that was mentioned above?
As the last reader posted, I guess i should only write an invoice with name, address, invoice number, steuer number, services, values.

Thank you a lot!
Liebe Grüße
Daniel