Companies owe the state VAT, which is added to all taxable invoice amounts. Small businesses are an exception here. The indication of the sales tax rate on the net remuneration is one of the mandatory information for invoices. However, what are the consequences of incorrectly reported sales tax for the invoice issuer and the invoice recipient?
The invoice issuer is required by law to issue proper invoices that contain all mandatory information. However, what happens if he incorrectly reports sales tax? A distinction is made here between 2 cases:
- If the VAT amount was calculated too high or too low, it is an incorrect tax statement according to § 14c Paragraph 1 Clause 1 UStG .
- If the invoice with sales tax was issued by a company not subject to sales tax or a private person, this is referred to as an unauthorized tax ID in accordance with Section 14c (2) UStG .
Incorrect VAT calculated – what now?
Incorrectly reported sales tax and thus incorrect sales tax can be costly. So how do you correct this correctly?
How is an overstated sales tax corrected?
If an entrepreneur subject to sales tax issues an invoice with an unlawfully overcharged sales tax amount, he is obliged to pay this additional amount to the tax office according to § 14c (1) UStG. However, the invoice recipient who is entitled to input tax deduction does not have the right to claim the excessively high sales tax against the tax office. He is only reimbursed the lower amount that he is legally entitled to for the service or delivery.
Correction: According to § 14 Paragraph 6 UStG in conjunction with § 31 Paragraph 5 UStDV, an invoice with excessively high sales tax can be corrected voluntarily, at the request of the invoice recipient or as a result of a special sales tax audit. If the entrepreneur has not yet paid the wrong VAT and the input tax has also not yet been reimbursed to the invoice recipient, it is sufficient if the wrong invoice is canceled and a new invoice is issued.
If the invoice recipient has already drawn the excessive input tax from the tax office or the invoice issuer has already paid the wrong VAT, the tax office must be informed. A correction will be made during the next advance VAT return. As soon as the incorrect invoice has been corrected, the biller no longer owes the tax office the additional amount. There the use of sales tax calculator is important.
VAT statement on tax-free services
If sales tax was levied on tax-free services, the invoice issuer owes the tax office the tax amount shown. The recipient of the invoice is not allowed to claim input tax.
Correction: As in the case of an overcharged tax statement, the invoice can be corrected by creating a new invoice with reference to the invoice number and invoice date of the incorrectly issued invoice.