In a statement for continuous power is in practice a permanent bill spoken. You use these as an entrepreneur if, for example, you always carry out the same orders or services for your customers at regular intervals. Another prerequisite is of course that the same payment is always agreed for these orders or services. In the following article you will find out what a recurring invoice is exactly and what needs to be taken into account.
What is a recurring bill?
According to Wholevehicles, a recurring invoice is an invoice for services that are provided over and over again . However, the prerequisite is that you always offer these services at the same price . Without the use of a recurring invoice, you would always have to create a separate invoice for each specific interval and the invoice recipient could use an input tax deduction every time . When creating a recurring invoice, you make a single invoice for the entire service period and thus save yourself the time of having to issue many individual invoices. As a rule, a recurring invoice is used in the case of continuous commercial obligations used. This can be, for example, a rental, leasing or leasing contract . When creating a recurring invoice, however, you also have to pay attention to a few points, for example the mandatory information for a recurring invoice.
Deadline for invoicing the recurring invoice
In the case of a recurring invoice, you must observe a deadline for issuing the invoice. If there is an obligation for you as a service provider to issue an invoice, then this must be created within a period of six months after the provision of the service.
Statutory minimum requirements for a recurring invoice
There are actually no special or special requirements on the part of the legislator for the recurring bill. Nevertheless, you have to observe § 14 UStG and the general components for invoices . In concrete terms, this means that there are certain requirements for a recurring invoice, as you know from an individual invoice. You must therefore observe the mandatory information in a recurring invoice.
The following mandatory information must be included on the recurring invoice:
- Name and address of the service provider
- Name and address of the recipient of the service
- Your tax number or your sales tax identification number
- Date of issue of your invoice
- A consecutive and unique invoice number
- The exact information on the type and quantity of the delivery or the type or scope of the service
- The time of delivery or provision of the service
- The time of payment
- Invoice amount including the applicable tax rate and the tax amount
- Agreed fee reductions, if this has been agreed in advance
Danger:
It is important that you mark this invoice as a recurring invoice. In practice, the label “recurring invoice within the meaning of § 14 UStG” is usually used for this . It is also recommended that you list the validity date of the recurring invoice. This is important because most recurring invoices are usually issued over a calendar year.
Special features of the recurring invoice
When it comes to recurring bills, you not only have to pay attention to the mandatory information for a recurring bill, you also have to pay attention to a few other peculiarities . These specifics are as follows:
- There should always be a validity date on the recurring invoice.
- If an entrepreneur regularly uses services from a commercial activity, he also has to pay sales tax on the recurring invoice , but can have this reimbursed by the tax office via input tax deduction . For this, however, the tax amount paid must be shown on the recurring invoice.
- There are no special legislative requirements for recurring invoices.
Input tax deduction for recurring invoices
With the recurring invoice, you must also note the regulation regarding input tax deduction . If you use commercial activities for your company , you have to pay sales tax as normal. However, you have the option of having this reimbursed by the tax office through the regulation of input tax deduction. For this, however, you need a recurring invoice that clearly shows how high the tax amount paid was . In addition, you must have submitted the reimbursement request for the input tax deduction of the standing invoice to the tax office by the end of the respective period for the pre-registration at the latest.
Recurring calculation examples
There are a few examples where you can create a recurring invoice or get a recurring invoice. Examples of a recurring invoice are:
- Long-term invoice for rental contracts
- Long-term invoice for lease contracts
- Long-term invoice for leasing contracts
- Recurring bill for maintenance contracts
Example of a long-term rental invoice
A recurring invoice is very often created in conjunction with a recurring rental invoice . In addition to the rental agreement, a commercial tenant can draw up a standing invoice so that he can claim his input tax deduction. If you want to create a recurring invoice that should apply to the rental agreement, you have to consider the following:
- You must enter your name and address as well as the name and address of the invoice recipient in the header area of the recurring invoice.
- The invoice must clearly of you as a permanent bill in are.
- Don’t forget the current date for the recurring bill.
- The recurring invoice must be able to be assigned at any time using a unique invoice number . It is also necessary that the invoice can be assigned to the corresponding rental agreement.
- In addition to the monthly rent, the sales tax to be paid and the applicable tax rate must be shown separately on the invoice. In addition, there is the total amount to be paid .
Calculation example
It would look like this:
- Cold rent 1,500 euros
- Additional costs 150 euros
- = Rental amount 1,650 euros
- 19% VAT 313.50 euros
- = Total monthly invoice amount of EUR 1,963.50
Example of a leasing period calculation
In the case of a leasing contract , too, it is very often necessary to create a recurring invoice. Such a recurring bill could look like this:
Example
It would look like this:
The lessor rents a vehicle to you and your company for three years. For this you have to pay 200 euros plus 38 euros sales tax per month. At the end of the agreed term of three years, the lessor has fulfilled its performance. For you there is a monthly partial service and thus also a monthly sales tax of these 38 euros. In order to be able to deduct the input tax from this payment, the lessor can either send you a monthly invoice or create a recurring invoice .
Conclusion
A recurring invoice is an invoice that is created regularly for a specified period of time . The supplying company thus fulfills the obligation to issue an invoice and the invoice recipient can claim his input tax deduction with the standing invoice. The recurring invoice is very often used for rental services.
