The line item list

How to create, edit, duplicate, delete and import items can be found here:

The line item list

Sales tax rate

In invoices you can also define the sales tax below the item list. Here's how to do that:https://www.youtube.com/watch?v=IVoDN3zyUBk

Which sales tax rate should be used?

As a rule of thumb for agencies: 19% (or 16% between 01.07.2020 and 31.12.2020)

Even if you purchase goods and services from a supplier, e.g. a caterer or hotel, at 7%, they will be sold to your customer together with other services at 19%.

Temporary VAT change 2020 in Germany

On 04.06.2020 the federal government initiated a bill that provides for reducing the sales tax rates from the current 7 and 19% to 5 and 16% for the period 01.07.2020 to 31.12.2020.

What does this mean for an agency's billing?

Economic significance

The change usually does not have an economic impact, since agencies are entitled to deduct input tax. Because agencies usually calculate their offers net, it is not expected that—contrary to what might be assumed in retail—profits will arise from differences between 16 and 19%.

When is which VAT rate applied?

In general: The date of service provision is decisive for the sales tax rate. For agencies, the service provision usually only occurs at the end of the period during which work on a job was carried out. That is, upon delivery of a result - e.g.: banners, a website or a workshop. If it can be avoided, invoices whose service period extends beyond 01.07.2020 or 31.12.2020 should be split into two documents: One document with services before the sales tax rate change and one document with the services after the change.

Attention with cancellation invoices (invoice correction)

If an invoice is cancelled, care should be taken that the date and service period of the invoice correction correspond to the date of the invoice to be cancelled, so that there are no tax payments for the difference.

Attention with partial and advance invoices

Advance invoices are usually issued when a job runs over a longer period. Note that an advance invoice at 19% may cause confusion when the final invoice is later issued (with 16%). We therefore recommend final billing of job parts at the respective legal VAT change date.

What to do if the advance invoice has already been issued at 19% but the final invoice only contains 16% VAT due to the service period?

In this example an advance invoice was issued at 19% in May, while the final invoice was issued at 16% in August. In the final invoice we offset the advance invoice. This can be done with a gross deduction as in this example:

Die Agenturverwaltung allows using the "gross deductions" function to handle such cases in final invoices: The advance invoice of a long-running job was issued at 19% in May 2020, the job is later billed at 16% in August, but the advance invoice should be taken into account accordingly. You should therefore contact your software provider in such cases and coordinate this with your tax advisor.

More about deductions can be found here:

Sales tax, discounts, totals

What to do if invoice date and service period do not coincide?

The VAT in the system is suggested based on the chosen invoice date, but the service period is relevant. If you want to create an invoice dated in June for a service in July, you can first set the invoice date to July, then select the VAT of 16% and then backdate the date again. You will receive a warning, but you can still save the document that way.