Proforma invoices in Germany: what they are for and why they are not invoices

What a proforma invoice is

The name is misleading. It refers to a document laid out like an invoice, with sender, recipient, line items and an amount, that is legally not an invoice. It does not trigger a booking, and it does not bill for a supply that has been made. "Pro forma" means "for the sake of form": the document has the form of an invoice, not its effect.

The German VAT Act does not know the term at all. What counts as an invoice is set out in § 14(1) sentence 1 UStG (German): any document that bills for a supply of goods or services, whatever it is called. The heading alone does not decide. A proforma only safely stays outside that definition if it clearly does not bill for anything and does not look as if it does.

What it is used for

Prepayment. In practice the most common case: the customer is supposed to pay before delivery and needs the amount, bank details and a payment reference to do so. Many purchasing departments will not release a bank transfer without a document. That is what the proforma invoice, or a simple payment request, is for.

Customs. For shipments to countries outside the EU where no sale takes place, such as product samples or spare parts under warranty, customs still asks for a value of the goods. The proforma invoice states it without creating a receivable.

A quote in invoice form. To release a budget, some customers want to see in advance what the invoice will look like. A proforma does that too.

What it should contain

Nothing is prescribed. These have proven useful:

• a clear heading "Proforma-Rechnung" (proforma invoice) or "Zahlungsaufforderung" (payment request), plus a sentence stating that it is not an invoice
• sender and recipient with addresses
• the line items with quantity and price
• the amount to pay and the bank details
• an order number as the payment reference, not a number from your invoice sequence

VAT and input VAT

For tax purposes, the proforma invoice is worthless to the customer. Input VAT deduction requires an invoice under §§ 14 and 14a UStG (§ 15(1) sentence 1 no. 1 sentence 2 UStG, German), and that only exists once the real invoice is issued.

Showing VAT on it is the trickier part. If you show more VAT on an invoice than you owe, you still owe the excess (§ 14c(1) UStG, German). The tax authorities also apply this when several invoices are issued for the same supply without being marked as a duplicate or copy (section 14c.1(4) UStAE, German). That is exactly the risk when two documents showing VAT exist for the same delivery: a proforma that looks like an invoice and carries an invoice number, and later the real invoice. The safe option is therefore a clearly labeled proforma with the gross amount and no separate VAT amount. Only the later invoice shows the VAT.

The tax itself does not depend on the proforma. If you receive money before the supply, you owe VAT on it at the end of the VAT reporting period in which the money arrives (§ 13(1) no. 1(a) sentence 4 UStG, German). That applies whether or not an invoice exists yet.

Prepayment, step by step

1. You accept the order and send the payment request with the amount, IBAN and order number.
2. The customer transfers the money with the order number as the payment reference.
3. You match the incoming payment to the order.
4. The real invoice is created: immediately for services and digital products, and on shipping for goods, so that the date of supply (Leistungsdatum) is correct. It notes that the amount has already been paid.

If less money arrives than requested, the question is whether you deliver anyway. If you do, the prepayment deal becomes a sale on invoice, where the payment counts as a down payment and the rest stays open.

How Rechnungskit handles it

Rechnungskit keeps the two documents strictly apart. For a manual order with prepayment, and for prepayment through the checkout or the shop page, the customer receives a payment request by email, in your name. It states the amount, bank details and order number. The email carries no invoice number, shows no VAT and says explicitly that it is not an invoice. In the checkout, the buyer also sees the same details on the confirmation page.

Once the money is there, you click "Payment received" on the order. That creates the e-invoice in ZUGFeRD format with a sequential number and a paid note, for goods after shipping. A partial payment does not create an invoice. If you switch the order to invoice, the invoice goes out immediately and the amount received is booked as a down payment. Rechnungskit does not create separate down payment invoices. It is not designed for proforma documents for customs purposes.

If the prepayment comes from your shop system, the same principle applies: Rechnungskit writes the invoice as soon as the shop reports the order as paid. How that works for Shopify, WooCommerce and Shopware is described on the respective pages.