Even if you try hard, every now and then mistakes will happen. This is completely normal. Even when creating invoices. If you have created an incorrect invoice , the customer has the right to a corrected invoice. An invoice correction must be written. But which regulations apply to invoice corrections and when do I have to change an invoice at all? And who is allowed to correct an invoice at all? We have summarized the most important things for you.
How do I correct an incorrect invoice correctly?
If an error has crept into an invoice, the customer can request a new, corrected invoice. This is especially important for business customers. Because incorrect invoices can endanger the input tax deduction. The statutory mandatory information according to § 14 Paragraph 4 UStG applies to invoices . And only if these are correct, the input tax can be deducted from the invoice for tax purposes.
But don’t worry, you won’t have to correct every typo or spelling error. If the purpose of the invoice is still clearly recognizable, the invoice does not need to be corrected. These small errors do not mean that the input tax cannot be offset in the advance VAT return.
But what if major errors in the invoice and mandatory information are incorrect or have even been forgotten? For example, if an incorrect invoice date or the delivery quantity were specified incorrectly. In that case, you have to correct the invoice. There are two ways to do this:
- 1. The invoice has not yet been posted
If the invoice has not yet been paid and posted, you do not have to write an invoice correction. You can either create a completely new invoice under the same invoice number. Or write a rectification document. This document is used to correct the incorrect information and send it to the customer. They must file the document together with the original invoice.
The following information should not be missing so that the correction document can be clearly and correctly assigned to the original invoice:
- Reference to the invoice date and invoice number of the original invoice
- Correction of the error
- Name and address of the service provider
According to technology-wiki.com, handwritten corrections are also possible. To do this, simply note the change on the customer’s original invoice and “notarize” it with your signature. Also make a copy of the corrected invoice so that you can file it with the original invoice.
- 2. The invoice has already been posted
In that case it is a bit more complicated because the invoice cannot be changed afterwards. The invoice must be canceled. To do this, you write an invoice correction with a negative invoice amount – the old invoice becomes invalid and “neutralized”.
Important: Just as for invoices, the statutory mandatory information according to § 14 Paragraph 4 UStG also applies to invoice corrections.
So that the invoice correction can be clearly assigned to the original invoice, the following information must not be missing:
- The original invoice number and
- The date of the original invoice
Then you write a new invoice with a new (!) Invoice number . It is best to include the old invoice number in the subject. This means that the new invoice can be assigned to the original invoice without any doubt.
And what happens if the invoice has already been posted, but the customer only keeps part of the delivery and sends the rest back? Then you don’t have to cancel the entire invoice. You only write an invoice correction for the returned part of the delivery and send it to the customer. This does not correct the actual invoice. But the corrected invoice adjusts the invoice amount and thus also the result.
Who can correct an invoice?
In order for an invoice correction to be accepted by the tax office, the service provider must always correct the invoice. Correction by the customer is not permitted. Even if the service provider agrees that the recipient can correct the invoice, this is not allowed. All changes may only be made by the biller.
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Invoice correction pattern
With an invoice correction template you can simply fill in your details and in a little time you have a legally compliant invoice correction that contains all mandatory information. You can find numerous templates online that you can adapt to your needs.
Invoice correction or credit – what’s the difference?
There are basically two forms of credit . On the one hand, the sales tax credit. And on the other hand, the commercial credit.
The credit in the sales tax sense is more of an invoice. However, this is not issued by the service provider, but by the service recipient – a reverse invoice, so to speak. One example of this is commission payments.
Commercial credits, on the other hand, have a different purpose: They neutralize an incorrect invoice. The original invoice will be canceled and corrected. This often happens when goods are returned or when the customer only keeps part of the delivery. According to the sales tax law, a commercial credit is therefore not a credit. It is an invoice correction.
The main difference also results from the amount of the credits. In the case of a VAT credit, the amount is positive – the recipient of the credit receives a sum of money from the sender. While a negative amount is specified for a commercial credit – the sender of the credit “gives” the recipient a monetary amount.
If the designation “credit” was previously used for both variants, this is no longer permissible with the Administrative Assistance Directive Implementation Act. Only sales tax credits may be designated as credits.
VAT relevance of the invoice correction?
But don’t worry, this is just a recommendation. Even if you name a corrected invoice as a credit note, the corrected invoice will not automatically be relevant for sales tax – § 14 c UStG does not apply. Provided that the corrected invoice clearly shows that the invoice has been corrected.
Luckily. Because according to this paragraph, the sales tax owed results as an additional amount from the higher, separately reported tax amount.
This applies if 19 percent sales tax is given instead of seven percent. But even if sales tax is incorrectly reported, although the biller has not been corrected, the tax amount is owed to the tax office.
Which name for the invoice correction?
Since a corrected invoice represents a commercial credit, it should also be recognizable. Therefore the invoice can be titled as follows:
- Correction calculation,
- Invoice correction or
- Cancellation invoice
With the clear description of a corrected invoice, there are also no problems with input tax deduction . If in doubt, you can also find templates for cancellation invoices and more online .
The actual taxation
One way of avoiding having to correct incorrect invoices is to use actual taxation . In this case, sales tax only has to be paid once the customer has paid the invoice. And not already when the delivery or service has been performed. This means that sales tax is only due for the invoice amounts actually paid – and not for the agreed amounts.
However, not every company can use the actual taxation. This rule only applies to
- Companies whose annual turnover does not exceed EUR 600,000 or profit does not exceed EUR 60,000 (not subject to accounting requirements)
- Freelancer (without turnover limit)
If an error has crept into an invoice or you have forgotten information, there is nothing to worry about. You can definitely correct the calculation. There are two ways to do this:
- If the invoice has not yet been paid, you can write a new invoice with the old invoice number. Or you can create a rectification document . In this you correct the errors and refer to the invoice number and the invoice date of the original invoice. As the biller, you also provide your name and address.
- If the invoice has already been posted, you can cancel it by writing an invoice correction with a negative invoice amount. So that this can be clearly assigned to the original document, you enter the invoice number and date of the original invoice. Then you write a new invoice with a new invoice number and send it to the customer. Voilà, the original invoice is no longer valid.