Output VAT and input VAT: calculate the balance and check the period

Calculate a simple September

Assume a German business makes ordinary taxable domestic sales at 19%, uses Sollversteuerung and has full input-VAT entitlement for these purchases. All services are completed in September and the required purchase invoices are available in September. There are no advances, corrections or special cases.

The VAT balance from these transactions is:

€570 − €228 = €342 payable.

The gross customer and supplier balances belong in the payment reconciliation. The €342 is the tax result of the stated transactions, not the difference between those two gross invoices.

Add one reverse-charge service

The business also receives €400 of ordinary B2B software services from an Irish supplier. Assume the recipient is the German business, no relevant supplier establishment in Germany participates, the general B2B place-of-supply rule applies and the service is taxable at 19%.

The supplier invoices €400 without VAT. The German recipient accounts for €76 reverse-charge VAT. With full deduction entitlement in this example, it also records €76 corresponding input VAT.

The complete calculation becomes:

€570 + €76 − €228 − €76 = €342 payable.

The additional service has no net VAT cost under these assumptions, but its tax positions still need to be recorded and reported correctly. Paying only €400 to the supplier does not mean the transaction has no German VAT consequences. The basis is §13b UStG, with deduction governed separately by §15 UStG.

Change the timing: the customer pays in October

Suppose both domestic invoices remain unpaid at 30 September.

Under the stated Sollversteuerung, the customer service’s €570 output VAT belongs to September because the service was performed then. Under authorised Istversteuerung, that ordinary sale’s output VAT generally follows receipt of payment; if the full €3,570 arrives in October, the €570 belongs there.

The ordinary domestic purchase’s €228 input VAT does not automatically wait for payment. In this example, the service and required invoice are already present in September. Reverse charge follows its own timing rules.

With only these transactions, the simplified comparison is:

The combined result remains €342. Only the allocation between periods changes. This table is limited to the assumptions above; advances and special transactions can behave differently. See §13 UStG.

Check why a deduction may differ

A supplier’s VAT line does not settle every question. Confirm the business recipient, relevant service, legally owed tax and applicable deduction restrictions. A purchase for exempt activities or mixed use may require a different result.

A Kleinunternehmer is not simply an Istversteuerer. The small-business exemption changes the VAT framework; it does not remove every possible reverse-charge obligation. Foreign VAT is also not ordinary German input VAT. Those cases require their own classification.

Review the monthly VAT accounts

Reconcile tax bases and tax amounts by treatment and period. Inspect output-VAT and input-VAT account balances, reverse-charge pairs, corrections and the reporting totals. A net amount that looks plausible can hide two missing tax positions that cancel each other.

Hans uses the client’s VAT setup, applies supported tax logic and supplies review evidence alongside the books. Filing the return and accepting its contents remain separate actions for the responsible person.

Continue with foreign VAT on supplier invoices and dates and accounting periods.