Mandatory information in the down payment invoice
From a purely legal point of view, a down payment invoice is considered a normal invoice. Therefore, it must not only contain the invoice number for the down payment invoice , but also all other mandatory information on an invoice . These are described as follows:
- Name of the invoice: The title of the invoice must be clearly identified as a down payment invoice.
- Delivery time: Under this point you have to state the expected date of the service provision. If this has not yet been determined, a note such as “not yet determined” or something similar must be noted.
- Name and full address of your customer
- Your tax number: Alternatively, you can also enter your sales tax identification number, if you have one.
- Date of issue and invoice number: Please make sure that the down payment invoice also has a consecutive invoice number.
- Description of the service: Under this point you have to list the exact scope of your service or the exact description of a product.
- Net amount of your service or delivery
- Gross amount: The gross amount must show the applicable tax rate and the resulting exact amount.
You have to make sure that all mandatory information is on the down payment invoice. Only if this is the case, as with a conventional invoice, is it considered a proper invoice and your customer can claim an input tax deduction .
Write a down payment invoice – you have to pay attention to that
As with any invoice, you have to make sure that the down payment invoice is drawn up precisely. According to TOPBBACOLLEGES.COM, this means that you pay attention to all mandatory information on the down payment invoice, note the point in time when the down payment invoice can be written and do not forget that you also have to pay attention to sales tax on the down payment invoice. You are definitely on the safe side when writing down payment invoices if you use an invoice program for it.
Calculate the correct deposit
As an entrepreneur who provides a service, you are entitled to be able to calculate a down payment and also to be able to settle this down payment. This takes place in the form of the down payment invoice. If your customer is entitled to an input tax deduction , you are even obliged to issue such an invoice. If he pays the down payment you have calculated, then he also has the right to claim this input tax deduction. As a rule, as a self-employed or freelancer, you have to provide a full service before you can issue an invoice. But there are definitely projects that take a long period of a few months and you have to provide some preliminary work. Of course, this results in some risks for you.
- Your customer becomes insolvent while the service is being provided . If you are lucky, you will be reimbursed part of your service in this case.
- However, the customer can also delay the payment or the acceptance before that. This can happen consciously through him or it can be the case by force. In this case, you may have to wait a long time for your money and thereby risk your liquidity and the very existence of your company.
For these reasons, it is quite understandable for longer projects that you calculate a down payment and want to offset this down payment. As a rule, an advance payment of around 30 percent of the total price is recommended.
The total price of your service is expected to be 50,000 euros net. You now have to calculate 30 percent of this sum, i.e. 15,000 euros plus sales tax, as a deposit and invoice the customer. This leaves an amount of 35,000 euros plus sales tax for the final invoice.
The down payment invoice and sales tax
When it comes to down payment invoices and sales tax, you have to consider a few things and know a few things.
|Actual taxation||The down payment invoice is always subject to the so-called actual taxation . This means that the sales tax for down payments is only paid to the tax office once the customer has paid the invoice and you have the money in your business account .|
|Is a down payment invoice taxable?||A down payment invoice is also taxable. However, due to the actual taxation , the tax liability only occurs with the receipt of payment. This also applies if you have not issued a down payment invoice and have still received a payment or if you only sent the down payment invoice later.|