Invoices to Germany not accepted electronically?
Thread poster: Nicole Y. Adams, M.A.

Nicole Y. Adams, M.A.  Identity Verified
Australia
Local time: 01:33
Member (2006)
German to English
+ ...
Jul 22, 2008

Good afternoon,

I regularly work with agencies in Germany. Some of them insist that every invoice must be sent by post, as this is a legal requirement in Germany and electronically transmitted invoices are not accepted. On the other hand, the other half of German agencies I work with accept my invoices as email attachments with no problems. This has always astonished me.

What is the actual situation in Germany, and how come some agencies accept electronic invoices while others claim this is not legal and need a hard copy in the post?

Secondly, when I send my invoices in the post they are identical to those I (would) send electronically. I.e. I do not put a stamp, signature, etc or anything else on them. So they are no different to what they would be if the client printed them off instead of me. So, again, why do they need to be sent in the post, given that I am only sending the same thing the client would get if printing it off?

Thanks


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Astrid Elke Witte  Identity Verified
Germany
Local time: 17:33
Member (2002)
German to English
+ ...
Electronic invoices must be legal in Germany Jul 22, 2008

Hi Nicole,

German laws are complicated and I cannot advise you on this issue about what the German laws say. However, I can give you the information that one of my main clients, a large firm of lawyers in Munich, requested me - already in 2006 - to stop sending them my invoices by post and to in future only send them electronically! I guess they would not have made that request if electronic invoices were not legal.

As for what is legal or not legal, it is my understanding, here in Germany, that an "e-mail invoice" in the sense of THE INVOICE ITSELF BEING INCORPORATED INTO THE BODY OF AN E-MAIL is not legally valid. However, a properly produced separate invoice, created as a Word or Excel document or whatever, and ATTACHED to the e-mail, is perfectly in order.

It is my guess that small firms, such as agencies, who do not know for sure what is legal or not legal, will want an invoice by post - "to be on the safe side" - if, that is, they are honest, and that is what their concern is.

It is also not inconceivable that agencies who would like to delay payment a little longer - and perhaps take a long time to "receive" an invoice, and write, in small print, in the P.O. that they will only pay the translator X number of days from RECEIPT of the invoice - will insist on being sent an invoice by post.

Best regards,

Astrid


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Ralf Lemster  Identity Verified
Germany
Local time: 17:33
English to German
+ ...
EU Directive 2001/115/EC Jul 22, 2008

Hi Nicole,


What is the actual situation in Germany, and how come some agencies accept electronic invoices while others claim this is not legal and need a hard copy in the post?

You would need to ask your customers what their specific reasons are...

As regards the legal framework, section 14 of the German VAT Act contains specific requirements regarding invoices, particularly electronic ones. Section 14 (3) provides that in the event of an invoice transmitted electronically, "the authenticity of the sender and the integrity of the contents must be ensured by (1) a qualified electronic signature, or a qualified electronic signature with provider accreditation pursuant to the Signature Act (...); or (2) electronic data interchange (EDI) in accordance with Article 2 of Commission Recommendation 94/820/EC dated 19 October 1994 (...)."

Directive 2001/115/EC sets out the minimum requirements for invoices in the EU. Article 2 (c) of the Directive contains provisions regarding the electronic transmission of invoices:


(c) Invoices issued pursuant to point (a) may be sent either on paper or, subject to an acceptance by the customer, by electronic means.

Invoices sent by electronic means shall be accepted by Member States provided that the authenticity of the origin and integrity of the contents are guaranteed:

- by means of an advanced electronic signature within the meaning of Article 2(2) of Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures(9); Member States may however ask for the advanced electronic signature to be based on a qualified certificate and created by a secure-signature-creation device, within the meaning of Article 2(6) and (10) of the aforementioned Directive;

- or by means of electronic data interchange (EDI) as defined in Article 2 of Commission Recommendation 1994/820/EC of 19 October 1994 relating to the legal aspects of electronic data interchange(10) when the agreement relating to the exchange provides for the use of procedures guaranteeing the authenticity of the origin and integrity of the data; however Member States may, subject to conditions which they lay down, require that an additional summary document on paper is necessary.

Invoices may, however, be sent by other electronic means subject to acceptance by the Member State(s) concerned. The Commission will present, at the latest on 31 December 2008, a report, together with a proposal, if appropriate, amending the conditions on electronic invoicing in order to take account of possible future technological developments in this field.

Member States may not impose on taxable persons supplying goods or services in their territory any other obligations or formalities relating to the transmission of invoices by electronic means. However, they may provide, until 31 December 2005, that the use of such a system is to be subject to prior notification.

Member States may lay down specific conditions for invoices issued by electronic means for goods or services supplied in their territory from a country with which no legal instrument exists relating to mutual assistance similar in scope to that laid down by Directives 76/308/EEC and 77/799/EEC and by Regulation (EEC) No 218/92.

When batches containing several invoices are sent to the same recipient by electronic means, the details that are common to the individual invoices may be mentioned only once if, for each invoice, all the information is accessible.



Secondly, when I send my invoices in the post they are identical to those I (would) send electronically. I.e. I do not put a stamp, signature, etc or anything else on them. So they are no different to what they would be if the client printed them off instead of me. So, again, why do they need to be sent in the post, given that I am only sending the same thing the client would get if printing it off?

Because a tax audit might find evidence that the document was, in fact, sent electronically. Without going into the details on the probability of a tax auditor coming up with conclusive evidence, I guess it's fair to say that some outsourcers are more risk-averse than others.

In the case of an invoice sent by a service provider domiciled outside the EU, it's probably (relatively) risk-free to use electronic invoices, as no VAT is involved (the main problem with the legal validity of electronic invoices is that the deduction of input VAT might be considered invalid, potentially creating a major tax liability). In any case, as far as I can tell, it's perfectly within a customer's rights to demand a hardcopy invoice - having said that, this should be made clear from the outset, not with the second reminder...

Best regards,
Ralf


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xxxBrandis
Local time: 17:33
English to German
+ ...
Ralf is right in his adv. here.. Jul 22, 2008

Hi! there is no such strict regulation about not accepting electronic invoices. But all have to show and pay taxes and keep a record. In individual cases pertaining to one´s own status, there may be some income and also tax related limits, it does not mean one should not earn more, only the tax optimum is one´s own responsiblity. In simple words, there is no strict line here. BR Brandis

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Margreet Logmans  Identity Verified
Netherlands
Local time: 17:33
English to Dutch
+ ...
Never a problem Jul 22, 2008

Hi Nicole,

I regularly work for a fairly large agency in Germany and incidentally for other German agencies. I always send my invoices as a PDF file attached to an e-mail and never had any problem (that is, they all got paid, albeit not always in due time - but that's another issue...)

Good luck,
Margreet


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xxxBrandis
Local time: 17:33
English to German
+ ...
Here are a couple of instances.. Jul 22, 2008

Hi! about 10 years ago I lived for a few years in tasmania and used to collaborate with my regular clients in germany. Those days I had given up my official operating entity in germany but out of habit I used to charge VAT. At one instance the question came that I should present the invoice in original and that week my printer was striking and it was about 28 km to the next priting station. The problem was the distance for one and the invoicing period for submission was over the next day. Then the agency had pointed out that the VAT will not be paid, the invoice value itself was not somuch I had to run 28 km to get it printed and faxed. But the agency had kept the money and paid as I was back in germany. By then the prices soaring so high, the value was just worth an evening meal. BR Brandis

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Kaiya J. Diannen  Identity Verified
Australia
Member (2008)
German to English
Me too (check reasons) Jul 23, 2008

Margreet Logmans wrote:

I always send my invoices as a PDF file attached to an e-mail...


My invoicing system is also now all electronic using PDF files, but I have it in the back of my mind that this may have been prompted by a client telling me the invoice needed to be in "uneditable" form.

Definitely check with your client(s) about their reasons, because I have been submitting electronic invoices to my German clients - and all my clients - for years.


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RobinB  Identity Verified
Germany
Local time: 17:33
German to English
Law v. practice Jul 23, 2008

Nicole,

Ralf's absolutely right about the legal requirements here in Germany (they also apply to faxes, BTW).

The upshot is that a client in Germany can require you to submit invoices on paper unless you have a digital signature system that is approved by the German government (which is probably rather unlikely). Note that this is *not* the same as a government-approved trust certificate used for e-mail transmission.

In practice, many clients are happy to accept PDF invoices (note to Janet: PDFs are not "uneditable", which is why they're not classed officially as electronic invoices by the German authorities), and ultimately it is their risk that a PDF printout will be rejected by a tax auditor. Our tax auditor has been looking very closely indeed at supplier invoices.

That's why some companies here in Germany will accept PDFs, but others won't. The bottom line is that if a German client wants a paper invoice, you have to provide one. Just accept it as part of doing business with German clients.

Note also that invoices issued from outside the EU are VAT-relevant for German customers. The reason is that we still have to charge "import VAT" on the amounts and reclaim the same amount as input tax, so such invoices are also covered by the German electronic invoice rules because they are required documents for VAT accounting purposes. Just for the record....

Robin


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Kaiya J. Diannen  Identity Verified
Australia
Member (2008)
German to English
(Aside on PDFs) Jul 23, 2008

RobinB wrote:

PDFs are not "uneditable", which is why...


This may be true, I'm no expert, but when the client sent the requirements, quoting German code (at the time) and their interpretation, the PDF format was suggested by the client itself.

I'm not really sure what would classify as completely uneditable these days. When everything can be scanned, photoshopped, hacked, etc. ...

One more reason to bow down and thank the gods of translating for a few reasonable clients.


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RobinB  Identity Verified
Germany
Local time: 17:33
German to English
Take the easy way out! Jul 23, 2008

Janet Rubin wrote:

I'm no expert, but when the client sent the requirements, quoting German code (at the time) and their interpretation, the PDF format was suggested by the client itself.

I'm not really sure what would classify as completely uneditable these days. When everything can be scanned, photoshopped, hacked, etc. ...

One more reason to bow down and thank the gods of translating for a few reasonable clients.


Hi Janet,

You're right, PDFs get cracked all the time, it's part-and-parcel of the translation business. And if your clients are happy with PDF invoices, there's absolutely nothing for you to worry about. The only thing that could happen is that they may ask you to retrospectiely send paper invoices as a result of a tax audit - would these then be "ex post invoices"?.

All I was trying to do was point out that the legal position is rather different.

Robin


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