Understanding VAT (Umsatzsteuer) · 2.11

Customer Advance Payments: When Is VAT Due?

Short answer

For advance payments, VAT arises as soon as the money is received, even under Soll-Versteuerung (accrual accounting for VAT) and even if the service is only provided months later.

Key points

Example: Project for €10,000 net. Advance payment of €5,950 in June, remainder upon completion in September.

June: €950 VAT in the advance return
September: the remaining €950

You issue an advance payment invoice with VAT for the advance payment. In the final invoice, you deduct the advance payments including VAT so that nothing is taxed twice. If the customer pays in advance without an invoice, VAT is still due in the month of payment.

Legal basis

§ 13 UStG§ 14 UStG

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Next video: Incorrect invoice: How do I correct it?
Related: Cash Accounting or Accrual Accounting for VAT?

With Pluto

In Pluto, you link the advance invoice and final invoice, and advance payments are automatically deducted.

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