In a recent decision (XI R 4/22), the Federal Fiscal Court (Bundesfinanzhof, BFH) has clarified the requirements for documents qualifying as invoices for VAT purposes – with far‑reaching consequences for businesses using payment requests, progress billing or advance payment documents.
When does a document qualify as an invoice for VAT purposes?
According to the BFH, a document may already qualify as an invoice if it contains certain minimum information: issuer, recipient, description of the supply or service, details of the consideration, and a separate statement of VAT. The designation of the document – for example as a “payment request” or “call‑off letter” – is not decisive; what matters is the objective impression on the recipient.
BFH decision on call‑off letters
In the case at hand, a company used so‑called call‑off letters. These did not contain an independent description of the supply or service but referred to offers, purchase orders, project and service descriptions as well as delivery or performance dates. In addition, VAT was shown openly. The BFH regarded this statement of VAT as contradictory: precisely the open disclosure of VAT created the appearance of a performance‑related invoice. The call‑off letters were therefore classified as invoices within the meaning of § 14c (2) of the German VAT Act (Umsatzsteuergesetz – UStG).
Unlawful VAT declaration under § 14c (2) UStG
Under § 14c (2) UStG, the issuer owes the VAT shown if VAT is stated separately without being entitled to do so – or if a person invoices “as if” he were the supplier, although no supply of goods or services has actually been rendered. The VAT liability thus arises regardless of whether a supply or other service has in fact been performed.
Practical implications
The judgment has immediate implications for the drafting of payment and billing documents. Businesses should clearly distinguish payment requests from invoices and show VAT only where this is permissible for tax purposes. Particular care is required when using standard templates that automatically show VAT – for example in ERP systems or in recurring billing processes.
Conclusion
The decision of the Federal Fiscal Court shows that the mere open statement of VAT in a payment document may lead to its qualification as an invoice – triggering a VAT liability under § 14c (2) UStG. The formal design of billing documents is therefore not a purely administrative issue but has direct tax implications.
Uncertain about invoices or payment requests? We advise you on the correct VAT treatment and help you avoid risks under § 14c UStG – feel free to contact us.
