Meanings of Small Business Invoice
In general, small business owners have fewer accounting obligations than a company that is subject to VAT. The bookkeeping should not only be simplified for small business owners, but also connected with less tax, since they are mostly below a certain turnover limit. Although a small business owner does not have to levy sales tax, he still has to adhere to the provisions of the Sales Tax Act. This applies above all to the compulsory components of a small business invoice , which are specified in Section 14 (4) of the UStG are listed in detail. Furthermore, according to § 14 Paragraph 2 Clause 1 UStG, small business owners as well as entrepreneurs are obliged to write an invoice within six months if a service has been provided to another entrepreneur. In this article, you can find out what other obligations and special features you have to consider with the small business invoice.
When are you a small business owner?
The conditions under which you are recognized as a small business owner can be found in § 19 UStG . The small business regulation represents a simplification regulation for companies with a low turnover. Most important are the limits that you have to observe in your turnover in the year of establishment and in the current year. This means that you and your company must not exceed a turnover of 22,000 euros in the year it was founded and 50,000 euros in the following year . The small business regulation exempts you from reporting sales tax .
By the way, you can also work as a small business owner if you run several companies . Here you have to note, however, that the total turnover of these companies does not exceed the statutory limits. But you have the advantage that there are no tax-exempt sales under the calculation for the total sales. What are tax-exempt sales is precisely defined in § 4 UStG .
Apply for small business regulation
According to THEINTERNETFAQS.COM, the small business regulation , you can directly apply to your establishment . Your responsible tax office will send you a questionnaire on how to record your taxes . As a founder, you must fill out this questionnaire. Under point 7 you will find “ Information on registering and paying sales tax ”. Here you can apply for your small business regulation . If you want to apply for the regulation later, i.e. after your establishment, you have to do so directly at your responsible tax office.
Advantages and disadvantages of the small business regulation
As a small business owner, you not only benefit from simplified bookkeeping , but also have other advantages that we have listed here for you. At the same time, however, the small business regulation also has disadvantages .
|Time saving : You do not need to make an advance VAT return and you can save a lot of time in your work. You do not have to report any tax and therefore do not have to report it to the tax office.||No input tax deduction :
With the small business regulation you have the disadvantage that you are not entitled to input tax deduction . This can be a disadvantage especially at a time when you have high expenses to make.
|Price advantages :
Your offer is primarily aimed at private customers and end consumers. Since no sales tax is due, you can offer your products or services cheaper.
|Competitive disadvantage :
If you offer your services or products to companies, they cannot claim input tax from your invoice. Therefore, it is entirely possible that they will turn to another company. You are at a clear competitive disadvantage here.
Writing a small business owner invoice
When you create an invoice, there are certain points that you absolutely have to consider so that your small business invoice is legally compliant and accepted by the tax office.
Mandatory information on the small business invoice
As far as small business invoices are concerned, as an entrepreneur you have to comply with some mandatory information for invoicing . This means that the following mandatory information must also be found on the small business invoice :
- Full name and address of the small business owner and the invoice recipient
- The tax number or the sales tax identification number
- The date of the invoice or issue
- A consecutive invoice number
- Quantity and type of products delivered or scope of services
- The (exact month) delivery or service date – can also be replaced by a note if the delivery / service date coincides with the invoice date
- Reference to the reason for the lack of sales tax information
Reference to § 19 UStG – formulation examples
It is important that you always include the reference to § 19 UStG on the invoice. For example, you can choose the following formulations:
- “According to § 19 UStG no sales tax is charged.”
- “No sales tax identification, as small business owners according to § 19 UStG.”
- “According to § 19 UStG the invoice amount does not include sales tax.”
- “Invoicing takes place without showing the sales tax according to §19 UStG.”
- “No sales tax ID due to application of the small business regulation according to § 19 UStG.”
- “As a small business owner within the meaning of Section 19 (1) UStG, no sales tax is charged.”
- “In accordance with § 19 UStG, no sales tax is included in the invoice amount.”
Sample invoice for small business owners
Fortunately, you don’t have to write every invoice yourself, but can save yourself time and effort. You can find numerous free samples and templates online for your small business invoicing. With a small business invoice template, you can create an invoice quickly and easily. The required mandatory information is already included, you just have to check that the corresponding invoice template for small businesses is valid and that it does not contain a sales tax certificate. The same applies if you want to make an offer .
Other advantages of a template for the small business invoice
- the invoice template is free of charge
- you can easily personalize a sample for your small business invoice
- all mandatory information required by law is already included and you cannot forget any
- the invoice template is quick and easy to fill out
- by using a template you create a professional impression