How to issue an invoice to a Verein (association) without VAT ID

[alaca 0]

Hello, 

 

I have tried reviewing the topics related to invoicing or charging VAT to a Verein, but I could not find the information I need. 

I am a freelancer project advisor and provide services to a versatile type of organizations. I have two questions in regard to invoicing and charging VAT to Verein

1. 2 of my clients are associations based in France but according to association law in France, they are not subject to VAT, therefore I can't apply Reverse Charge in  my invoices because they have an invalid VAT ID number for intra-community services. What would be the normal procedure for invoicing and charging VAT to Verein? 

 

2. I have been using Sorted for creating my invoices and you need to insert the clients' VAT ID numbers if they are out of Germany but in EU. As these clients have invalid VAT ID numbers, I can't add them as my clients because the system does not allow me and I must add the VAT ID of service recipient according to the Finanzamt. How could it be possible invoicing an organization without valid VAT ID? 

 

I'd really appreciate if you kindly share your experiences and/or knowledge or any sources I can refer to. 

 

 

 

[PandaMunich 16,864]

4 hours ago, alaca said:

1. 2 of my clients are associations based in France but according to association law in France, they are not subject to VAT, therefore I can't apply Reverse Charge in  my invoices because they have an invalid VAT ID number for intra-community services. What would be the normal procedure for invoicing and charging VAT to Verein? 

If their VAT ID number are not valid, you have to treat them as private end consumers, i.e. charge them 19% German VAT if you're VAT-charging or if you're a Kleinunternehmer, no VAT at all (but please note that this turnover will also count towards your 22k€ Kleinunternehmer turnover limit).

[alaca 0]

Thank you very much, PandaMunich. I started to work officially as a freelancer on 03.10.2022, my estimated income for the year of 2022 way below 22k€, while it is just a bit more than 22k€. In this case, can I be recognized as Kleinunternehmer?Does the recognition of Kleinunternehmer depend on the year of turnover? 

[PandaMunich 16,864]

@alaca

What start date and what estimated turnover (Umsatz) did you fill into your "Fragebogen zur steuerlichen Erfassung", with which you informed the Finanzamt that you want to start freelancing and with which you applied for the freelance tax number that you have to mention in all your invoices?

This turnover is pro-rated, so if you filled in a start date of 03.10.2022, you would only be a Kleinunternehmer if you had filled in 5500€ or less as the estimated 2022 turnover (Umsatz), since 3/12 * 22,000€ = 5,500€.

If you filled in a start date of 01.07.2022, then up to 11,000€ turnover (Umsatz) would still make you a Kleinunternehmer in 2022.

If you filled in a start date in January 2022, e.g., 15.01.2022, then up to 22,000€ turnover (Umsatz) would still make you a Kleinunternehmer in 2022.

 

Have you issued any invoices yet in 2022?

 

Please note that only money that you receive in 2022 (= date it enters any of your worldwide bamk accounts) counts as 2022 turnover.

So if you issue an invoice in 2022 and the client only pays it in 2023, that is 2023 turnover.

[alaca 0]

I submitted by Fragebogen on 20th August 2022, but my official start to freelancing is 03.10.2022. And, yes I've issued one invoice to a company with a valid VAT ID number, so the Reverse Charge was applied. I have not issued an invoice to these two Vereine, just trying to be sure how to proceed. 

 

 

I am sharing the respective lines from my Fragebogen: 

1."Angaben zur Festsetzung der Vorauszahlungen (Einkommensteuer, Gewerbesteuer)

Voraussichtliche Einkünfte aus Selbständiger Arbeit

 Steuerpflichtige(r) im Jahr der Betriebseröffnung: 5.400

 Steuerpflichtige(r) im Folgejahr: 22.500" 

2."Angaben zur Anmeldung und Abführung der Umsatzsteuer"

Summe der Umsätze (geschätzt)

 im Jahr der Betriebseröffnung: 6.000

 im Folgejahr: 24.000"

3."Angaben zur Anmeldung und Abführung der Umsatzsteuer"

Summe der Umsätze (geschätzt)

im Jahr der Betriebseröffnung: 6.000

im Folgejahr: 24.000" 

In this case, am I recognized as Kleinunternehmer or not? 

Although I have this estimated turnovers, I may not have the amount of 5500Euros in 2022 unless I can not issue my invoices. 

 

[PandaMunich 16,864]

@alaca

What "Gründungsdatum" did you state in your Fragebogen (around line 87)?

And what did you state in the section "Kleinunternehmer-Regelung" (around line 123)?

 

Have you bought expensive things for which you want the VAT back? This is only possible if you're VAT-charging.

[alaca 0]

Gründungsdatum is 03.10.2022

I filled the Fragebogen through Sorted in English. The submitted registration form which was submitted and sentby Sorted. In my registration form, it seems the section Kleinunternehmer-Regelun is missing as far as I remember it was indicated "optional" and I did not mark anything on the platform. 

 

 

 

[alaca 0]

54 minutes ago, PandaMunich said:

@alaca

Have you bought expensive things for which you want the VAT back? This is only possible if you're VAT-charging.

No, I have not bought expensive things. 

[PandaMunich 16,864]

2 hours ago, alaca said:

I submitted by Fragebogen on 20th August 2022, but my official start to freelancing is 03.10.2022. 

...

2."Angaben zur Anmeldung und Abführung der Umsatzsteuer"

Summe der Umsätze (geschätzt)

 im Jahr der Betriebseröffnung: 6.000

 

2 hours ago, alaca said:

Gründungsdatum is 03.10.2022

 

VAT-charging in 2022:

Sorry, but then you're VAT-charging in 2022, because:

• 6.000€ / 3 months (October to December 2022) * 12 = 24,000€ > 22,000€ limit.

If what you do is economic consulting, i.e. "Wirtschaftliche Unternehmensberatung", see the very end of this list: https://www.gesetze-im-internet.de/ustdv_1980/anlage.html

--> you can get back - instead of the real VAT from services/items that you bought for your business in 2022 - a VAT reimbursement based on the average VAT reimbursement of all "economic consultants" of:

• 1.7% * net_turnover_received_in_2022, but only on net turnover on which you earned German VAT for the Finanzamt, i.e. not on the reverse-charge turnover

Since you say you did not buy expensive things in 2022, getting 1.7%*turnover may be more advantageous to you than claiming for the "real" VAT of your business purchases.

 

However, not getting the "real" VAT but instead this "average" VAT is only possible if you really have one of the privileged professions from the above list, the legal source for this is § 23 UStG in conjunction with §§ 69, 70 UStDV.

 

And it is only possible as long as the yearly turnover on which you earned German VAT during the past year is up to 61,356€, see §69 (4) UStDV: https://www.gesetze-im-internet.de/ustdv_1980/__69.html

 

**************************************************************************************************************************************************

 

Kleinunternehmer in 2022:

The only thing you could do to still be classified as a Kleinunternehmer in 2022 is tell the Finanzamt that your Gründungsdatum (which was supposed to be the date you start even preliminary actions, not just the date you really started working) was in reality 20. August 2022.

 

If they agree, your pro-rated estimated 2022 turnover would be:

• 6,000€/5 * 12 = 14,400€ < 22,000€ Kleinunternehmer limit

and you could be a Kleinunternehmer in 2022.

Please also read: https://www.haufe.de/finance/haufe-finance-office-premium/kleinunternehmer-22-umsatzgrenzen-bei-neugruendung_idesk_PI20354_HI1342178.html 

 

If you see on 31. December 2022 that the turnover (excluding the reverse charge turnover, since that does not count towards the 22k€) that you received in 2022 exceeded 22,000€, you will lose Kleinunternehmer status immediately. Which means that you will have to start charging German VAT in your non-reverse-charge invoices from the very next day, i.e. starting with 1. January 2023!

[alaca 0]

Thank you very much! I'll check this with the Finanzamt. 

6000 Euros means turnover for 2022 according to quoted section, right?

[alaca 0]

Do I have to insert my clients' VAT ID Number even though they are invalid? 

As you know, I'm obliged to put this number on the invoice, right? I have to charge VAT is this number still needed on the invoice? (if the Finanzamt does not accept me as a Kleinunternehmer)

[PandaMunich 16,864]

53 minutes ago, alaca said:

6000 Euros means turnover for 2022 according to quoted section, right?

Yes, "Summe der Umsätze im Jahr der Betriebseröffnung" means "total turnover in the year of starting the business", i.e. in 2022.

This is only the non-reverse-charge turnover, i.e. the turnover from which you would owe VAT if you are VAT-charging in 2022.

 

You really should have consulted someone before filling in the Fragebogen. As soon as you have international business, things get complicated.

 

14 minutes ago, alaca said:

Do I have to insert my clients' VAT ID Number even though they are invalid? 

As you know, I'm obliged to put this number on the invoice, right? I have to charge VAT is this number still needed on the invoice? (if the Finanzamt does not accept me as a Kleinunternehmer)

No, only if you are writing a reverse charge invoice, i.e. one without VAT are you obliged to put in the client's VAT ID number as the justification for why you are not charging VAT on your services.

Just read what additional things (additional to the default details) a reverse charge invoice has to contain in §14a (1) UStG: https://dejure.org/gesetze/UStG/14a.html

 

You, on the other hand, will be writing a "standard" invoice with German VAT, and such an invoice just has to contain the default details listed in §14 (4) UStG: https://dejure.org/gesetze/UStG/14.html

[alaca 0]

I got some support by other fellow freelancers and searched about how to fill out it but as you said it gets complicated with such special conditions like Vereine, no valid VAT ID, etc. and yes! I should have consulted with a "professional". 

 

I'll dig into the relevant gesetze you've shared. Thank you very much, I appreciate your help! 

[alaca 0]

Hi PandaMunich, I read that there is a threshold for invoices for small amounts is 250 Euros. Does it mean that I do not have to charge VAT or charge reduced VAT on the invoices if the amount is less than 250 i.e. 200 Euros?

[PandaMunich 16,864]

9 minutes ago, alaca said:

I read that there is a threshold for invoices for small amounts is 250 Euros. Does it mean that I do not have to charge VAT or charge reduced VAT on the invoices if the amount is less than 250 i.e. 200 Euros?

No, you always have to charge VAT if you are not a Kleinunternehmer and are not writing a reverse charge invoice.

 

The only difference with a Kleinbetragsrechnung, i.e. an invoice of up to 250€, is that it does not have to contain all those default details listed in §14 (4) UStG and is still a valid invoice.

You can see all details a Kleinbetragsrechnung has to contain in §33 UStDV: https://dejure.org/gesetze/UStDV/33.html

[alaca 0]

Thank you very much! 

I checked your profile and you are a tax advisor, right? 

Do you accept new clients? I apparently need one... 

[PandaMunich 16,864]

59 minutes ago, alaca said:

Do you accept new clients?

No, sorry, as is stated on my website, I am not accepting new clients.

 

You could try asking Patrick Kühl, he is also a Steuerberater and offers tax advice in English: https://stb-pk.de/en/about-me

[alaca 0]

Thank you very much!