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recipient of the expenses. However, this problem will not typically exist as
the tax payer will have received invoices from the Cloud service provider.
For input tax deduction, the business owner must note that billing on the
part of the provider must comply with the provisions of VAT/input tax law.
In order to claim input tax, an invoice must contain the following details:
Name and address of the service provider and service receiver
Date issued
Serial number of the invoice
Quantity and description of the objects supplied, or scope and type
in case of other services
Time of performance
Charge
Tax rate, tax amount, a note to tax exemption if applicable, or
indication of reverse charge
The service receiver is well advised to check incoming invoices for these
components. In the case of a later objection by the tax authority, e.g. in the
course of an audit, input tax claims may be completely refused. This can
happen if the service provider is incapable of issuing a corrected invoice, e.g.
after terminating the services or in case of insolvency.
Invoices can either be issued on paper, or given the acquiescence of the
recipient, electronically. This includes invoices transferred by e‐mail,
possibly as PDF or text attachments, by computer facsimile or fax server, by
web download or in the scope of electronic data exchange (EDI). No specific
technical transfer method is prescribed. In Germany, the intent is to reduce
the extremely strict requirements for electronic invoicing and thus further
reduce bureaucracy. Thus far, it has been necessary for electronic invoices
to contain a qualified electronic signature, or the EDI method to be used.
The intent is to drop this strict requirement in the course of the intended
simplification of electronic invoicing. In addition these methods, which will
continue to remain permissible, other methods will be approved, given that
they are suitable for electronic transfer of invoice content and the business
owner can guarantee the genuineness of the invoice's origin, the integrity of
its content, and legibility. The details of these changes in Germany are
currently unclear. Thus, much caution is still advisable when exchanging
invoices electronically.
