In principle, as an entrepreneur you are obliged to issue an invoice when you provide a taxable service to another entrepreneur or a legal entity (§ 14 UStG). For services to private individuals, there is only an obligation if the recipient explicitly requests an invoice or if special legal provisions apply, for example in the construction industry.
For proper accounting, a document as proof of every booking is essential. The invoice must contain certain mandatory details – this also includes the correct billing address of the invoice issuer as well as that of the invoice recipient.
The correct billing address – why is it important?
Since the billing address is one of the mandatory details on an invoice, it must meet legal requirements. But what belongs to a correct billing address?
- The billing address usually contains the personal or company-related details of the invoice recipient – i.e., the party obliged to pay. It is important that the address is complete and error-free.
- Incorrect addresses can mean that invoices are not delivered and, as a result, are not paid on time. This can lead to liquidity bottlenecks for your company.
- Payment reminders could also be mistakenly sent to the wrong address, which can result in payment delays and customer frustration.
- Equally important is the correct address of the invoice issuer. This is because the tax office only recognizes the invoice as a basis for input tax deduction if it is complete and correct. According to § 14 (4) UStG, the invoice must include, among other things, the full name and the full address of the supplying entrepreneur. If this information is incomplete or incorrect, the input tax deduction may be denied.
What exactly is meant by “full address” was disputed for a long time. In 2018, the Federal Fiscal Court (BFH) ruled (judgment of 21/06/2018, V R 28/16) that it is sufficient if the entrepreneur can be reached at the address stated – economic activity does not necessarily have to be carried out at this address. This means that P.O. box addresses, mailbox addresses, c/o addresses, or business premises can also be recognized as a billing address.
Billing address on e-invoices
Since 27 November 2020, public contracting authorities in Germany have been required to accept electronic invoices in the XRechnung format. More and more companies are also relying on digital invoices to simplify processes and reduce costs. From 2025, the e-invoice will also be further strengthened within the EU. Many member states, including Germany, are gradually implementing a comprehensive obligation to issue electronic invoices using e-invoicing software through to 2028.
The same legal requirements apply to electronic invoices—whether PDF or XRechnung—as to paper invoices. The billing address of the recipient and issuer must therefore also be correct and complete here. Use modern invoicing software to store your data error-free and in an automated way.
Data protection – billing address and GDPR
The billing address often contains personal data, such as names and addresses of natural persons. Therefore, the General Data Protection Regulation (GDPR) also applies here. You should ensure that this data is processed only for the purposes for which it is needed—such as invoicing and accounting—and that it is protected from unauthorized access.
Tip
Since 2025, all companies have been required to be able to receive and process e-invoices; by 2028, sending e-invoices will also become mandatory. Learn everything about legally compliant creation of e-invoices in our guide.
Mandatory information in the billing address
Depending on the recipient of the document, there are different requirements for the contents of the billing address. The following mandatory details must be included in every invoice. This also applies to down payment invoices or payment reminders.
For individuals:
- First name and last name
- Street and house number
- Postal code (ZIP) and city
- If applicable, the country as well, if it does not match the invoice issuer’s country
For businesses:
- Company name
- Registered company name and legal form of the company
- First name and last name
- Street and house number
- Postal code (ZIP) and city
- Country (Definitely important for international invoices!)
- Optional: Recipient name or department
Billing or shipping address
When do I choose which address?
The shipping address is the address to which the goods are delivered. In some cases, this is not identical to the billing address:
- A company has goods delivered to a warehouse that is located somewhere else than the business premises.
- A company uses a billing address as a P.O. box to optimize the capture and archiving of documents.
- A common everyday case: The invoice recipient is a different person than the goods recipient—such as when sending a gift.
Correcting an incorrect invoice – what needs to be considered?
If you have issued an invoice incorrectly, you may of course correct it. For the purposes of input tax deduction, an invoice can only be corrected if it contains information about the invoice issuer, the recipient of the service, the description of the service, the remuneration, and the separately stated VAT.
If an invoice does not meet these conditions, substantial costs may arise: The input tax originally claimed can accrue interest at six percent per year until the correction is made.
Since such corrections are often made in the course of tax audits, the interest damage can be high. In such cases, legal counsel is advisable, especially as there are also differing rulings on this by the European Court of Justice (ECJ).
Frequently asked questions about the billing address
Not necessarily. You can also use a different billing address, e.g., a P.O. box or a c/o address, as long as it is complete and the recipient can be reached there.
Yes, you can change the billing address if it was originally stated incorrectly or incompletely. Be sure to comply with the regulations for a correct invoice correction so that the input tax deduction is not jeopardized.
No, an invoice should always state only one billing address for the recipient. If you have multiple contacts, you can add them as a contact person or department, but not as a separate billing address.
An incorrect billing address can result in the recipient not receiving the invoice or the input tax deduction not being recognized. In addition, it can lead to objections during a tax audit.
You can verify the billing address via public registers (e.g., the commercial register, company websites) or by checking directly with the customer. For foreign business partners, it is also advisable to verify the VAT identification number.
