Freelance invoices from USA to Germany

20 posts in this topic

Hey everyone, I will make this as short as possible:

 

We are a company based in Germany and are planning to work with a couple of freelance writers that are based in the United States. And since we do need an invoice for every project, my question is what exact infos the freelancers have to put on their invoices.

 

Is it enough for them to include their name, address and contact details as well as our company name and our address/contact details? Or do they have to also include any tax information?

 

I just did an extensive Google session but couldn't find any answer for this, so if anyone could help me – it would be much appreciated!

 

Thanks a lot!

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If you have a tax or social insurance inspection the inspector will want to be sure you are paying bona-fide invoices to foreign entities and not potential fakes. There are no set rules about what the invoice should contain, but if working with freelancers ask then for proof of their freelance status such as a tax registration and/or social security number (to be either kept with the invoice or held on file somewhere). It's generally best to pay them via bank transfer to an account with their name on it. If possible have them send an original (printed, not hand-written) invoice with their signature. Your full address should be correctly entered on the invoice as well as theirs along with reasonable detail as to the work performed and when it was done so you can refer back to the projects they were assisting with.

 

None of this is a requirement in Germany, but it demonstrates that you have been duly diligent in checking their professional existence.

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Wow, thanks so much for the quick replay. Your answer helped a lot! Would you say the freelancer should also add the "Steuernummer" and "Umsatzsteuer Identifikations ID" on the invoice?

 

Thanks again!

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You said that they were all freelancers from the USA - an American freelancer has no "Steuernummer" or "Umsatzsteuer Identifikations ID" that he can include

 

Under German invoicing rules a German freelancer or company MUST include the "Steuernummer" OR "Umsatzsteuer Identifikations ID" (or both).

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I was under the impression that any individual invoicing a German company must register for German income tax. Even if not resident in Germany.

Which is why foreign freelancers always tend to go through management companies.

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That would (may) apply to foreign freelancers physically working in Germany, rather than working from their home in the US for German clients.

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I was told that by the Finanzamt in 1993 when I just started a contract moving from France and would spend less than 183 days in 1993 in Germany. They told me if I invoiced a German company directly I'd have to pay German tax even if I spent only a single day here.

 

In principle when Germany companies are invoiced by corporate entities they are insulated from the tax sins of these entities, but when invoiced by individuals they can be held liable for, and required to pay the tax sins of these individuals

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First of all – thanks for all the replies! Looks like there's a great community here.

 

@YorkshireLad6: I meant if the American Freelancer has to add the "Steuernummer" and "Umsatzsteuer Identifikations ID" from our company to his invoice, in addition to our address, etc...

 

@MadAxeMurderer: Whew! That would be heavy... do you have any source for that? I'd like to believe Yorkshirelad on this one, haha.

 

Anyway, thanks for all the help guys!

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No - unless they need to show it for the American authorities (which I doubt) then no need to add those details...

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Does a company have a Steuernummer? I thought those were for private people, and used to pay Einkomsteuer. Companies pay Firmensteuer.

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On 4/29/2014, 8:16:20, YorkshireLad6 said:

You said that they were all freelancers from the USA - an American freelancer has no "Steuernummer" or "Umsatzsteuer Identifikations ID" that he can include

 

Under German invoicing rules a German freelancer or company MUST include the "Steuernummer" OR "Umsatzsteuer Identifikations ID" (or both).

I have a question about this. Does it have to be on every invoice? It would be a huge liability to include a social security number in a invoice. It would never be allowed internally in the US because if someone has it they can easily steal your identity. Or if it is hacked. That means if you are receiving this data you would have to guarantee rigorous data protection with anyone touching the invoice. As sole proprietorships a single person cannot apply for an EIN which would represent them as a business. Freelancers in the US fill out a document (1099) that has the social security number  on it when they start work. This is the one and only time that information is provided and it is usually given in person. I'm in HR and trying to figure out how to invoice. I'm not comfortable providing this in digital it's like the biggest no no in HR. 

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And to the original poster what did you end up doing?? I'd be comfortable providing the number one to the tax people (like we do here). 

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2 minutes ago, Such said:

I have a question about this. Does it have to be on every invoice?

 

As YorkshireLad wrote – as a German freelancer or company  you MUST include the "Steuernummer" (tax number) OR "Umsatzsteuer Identifikations ID" (VAT tax number) or both.

 

2 minutes ago, Such said:

 

 

It would be a huge liability to include a social security number in a invoice.

 

This is not about your social security number but you tax number.

 

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20 minutes ago, Such said:

 As sole proprietorships a single person cannot apply for an EIN which would represent them as a business

 

Someonesdaughter clarified the German case and the difference between the numbers so just for completeness, here's the US part: IRS EIN information ... a while back when I was working there, I filed for an EIN as a sole proprietor (my choice) and there was no problem with getting the number.

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I'm an American living in America paying taxes in America freelancing for a German company. I will look again but I am not seeing where I am able to apply for an EIN if I don't have any employees. All freelancers  inside the US have to fill out a 1099 form which says to   use your social security number where the EIN is listex. Regarding tax number vs Social Security number, that *is* your tax id number. If you said give me your tax ID number to an American they would have no idea what you are talking about.  Unless you're an LLC or Inc. then you have an employer identification number (EIN). I work with freelancers/ independent contractors all the time within the US. The provide their social only once on the 1099. It is highly confidential, and it is the company's obligation to protect that number so that your identity is not stolen. This is why I don't want to provide it on a recurring basis on invoices. Are you sure you weren't just told to use the social in place of the EIN in the 1099 or did you actually actually apply for one from the IRS? I'll dig deeper but last time I looked I couldn't find that option if you weren't employing  people.

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OK I'm seeing that ability to apply online for the EIN using your social in place of a company tax ID but the system is down. Thanks for the help !! (And link)

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22 minutes ago, Such said:

I'm an American living in America paying taxes in America freelancing for a German company. (...) 

 

I suggest you change your profile that says "Location: Berlin" unless that's one of the numerous US Berlins ...

 

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