Invoicing to customers in third countries
If your business is based in Germany and you provide services to customers in third countries, special VAT rules apply. The key factor is where the place of supply is located and whether your customer is a business or a private individual.
A third country is any country outside the European Union, such as Switzerland, the United States, or the United Kingdom.
General principle: German VAT law applies
If your business is based in Germany, your invoicing is generally governed by the German VAT Act (UStG).
For the tax assessment, the following points are particularly important:
the place of supply
the location of your customer
whether you deliver goods or provide services
whether your customer is a business (B2B) or a private individual (B2C)
The place of supply determines whether German VAT applies.
Invoices to businesses in third countries (B2B)
If you provide services to a business in a third country, the general rule applies (§ 3a para. 2 UStG):
The place of supply is where the customer’s business is located
The service is not taxable in Germany
No German VAT is charged
You issue a net invoice
Typical note on the invoice:
“The service is not taxable in Germany.”
There is no legally required wording, but such a note is recommended.
Important: Your customer must be a business. You should be able to prove this with appropriate documentation.
Invoices to private individuals in third countries (B2C)
If you provide services to private individuals, a different rule applies. In this case, the decisive factor is not where your customer lives, but where your own business is located.
General rule (§ 3a para. 1 UStG)
The place of supply is generally where your business is established.
If your business is located in Germany:
the place of supply is Germany
the service is taxable in Germany
German VAT generally applies
This means:
Services provided to private individuals are usually subject to German VAT—even if the customer is in a third country.
Exceptions: Place of supply may shift to the third country
There are legal exceptions where the place of supply is determined differently, for example:
real estate services
short-term rental of means of transport
restaurant and catering services
event admission services
certain electronic services
so-called catalog services (§ 3a para. 4 UStG)
If the place of supply is in the third country under these rules, the service is:
not taxable in Germany
and therefore not subject to German VAT
In such cases, foreign VAT may need to be charged and paid in the respective country.
Delivery of goods to third countries (export)
Deliveries of goods to third countries are generally VAT-exempt (§ 4 no. 1a UStG) if the export requirements are met.
A proper export certificate is required.
In this case:
you issue an invoice without German VAT
the delivery is VAT-exempt
Typical note:
“VAT-exempt export delivery according to § 4 no. 1a UStG.”
Mandatory information on your invoice
Even when invoicing third countries, you must comply with German VAT invoice requirements.
Your invoice must include:
your full name and address
your tax number or VAT ID
your customer’s name and address
invoice date
sequential invoice number
description of the service or goods
invoice amount
note on VAT exemption or non-taxability (if applicable)
Important: If the service is not taxable or VAT-exempt, you must not show German VAT.
Example: Consulting service for a company in the USA
You provide consulting services to a company in the USA.
Example invoice:
Net amount: €5,000
VAT: €0
Note: “The service is not taxable in Germany.”
Documentation requirements
You must be able to prove that your customer is located in a third country.
Suitable evidence includes:
invoice address
company documentation
contracts
business correspondence
For goods exports additionally:
export certificates
shipping documents
customs documents
These documents must be retained.
Summary
German VAT law generally applies
B2B services to third countries are usually not taxable in Germany
B2C services are generally taxable in Germany
German VAT only does not apply if a legal exception applies
Goods exports are usually VAT-exempt with proper documentation
Invoices must contain all mandatory information
Proof of third-country status is required
Our recommendation: Case-by-case assessment
The VAT treatment of services to third countries strongly depends on the specific type of service and whether your customer is a business or a private individual. Even small differences can lead to different tax treatment.
If in doubt, we always recommend an individual tax assessment and early consultation with your tax advisor.
Frequently Asked Questions
Does the place of invoicing affect German VAT?
Does the place of invoicing affect German VAT?
No. What matters is German VAT law, the place of supply, and the status of the supplier—not the location from which the invoice is issued.
Does a third-country location need to be listed on the invoice?
Does a third-country location need to be listed on the invoice?
No. The relevant information is the address of the supplying company.
Are electronic invoices from third countries permitted?
Are electronic invoices from third countries permitted?
Yes. The prerequisites are that authenticity of origin, integrity of content, and readability are ensured.