VAT automation
19%, 7%, tax-exempt, Reverse Charge, export — the right tax rate together with the mandatory legal note, derived automatically from your master data.
Why VAT on e-invoices is so error-prone
On an e-invoice, VAT is not just a percentage but a structured data field: every line item carries a category per UNCL5305, every category needs consistent rates, totals and — for exemptions — the appropriate reason. One wrong letter and the document fails the recipient’s validation.
Especially for companies with EU customers or third-country business (such as logistics), manual assignment is a permanent risk. That is why CoolHanX derives it rule-based — visibly and overridable.
| Constellation | Category | Rate | Mandatory note on the invoice |
|---|---|---|---|
| Service/supply to a customer in Germany | S (standard) | 19% or 7% | — |
| B2B service to EU customers with USt-IdNr | AE (Reverse Charge) | 0% | „Reverse charge — the recipient is liable for the tax (§13b UStG)“ |
| Supply of goods to EU businesses | K (intra-community supply) | 0% | „Tax-exempt intra-community supply (§4 Nr. 1b, §6a UStG)“ |
| Export to a third country | G (export) | 0% | „Tax-exempt export supply (§4 Nr. 1a, §6 UStG)“ |
| Tax-exempt service (§4 UStG) | E | 0% | Reason for exemption |
| Cross-border transport / not taxable | O / 0% cases | 0% | relevant note (e.g. §3a/§4 Nr. 3a UStG) |
| Code | Meaning | Rate | typical use case |
|---|---|---|---|
| S | Standard rate | 19% / 7% | Domestic transactions |
| AE | Reverse Charge | 0% | EU B2B service, §13b cases |
| K | Intra-community supply | 0% | intra-community supply |
| G | Export outside EU | 0% | export to a third country |
| E | Exempt | 0% | §4 exemptions (e.g. medical treatment) |
| O | Not subject to VAT | — | transactions not subject to VAT |
The B2C safeguard
Reverse charge presupposes a business as the recipient. If the EU customer’s USt-IdNr is missing, CoolHanX does not apply the rule silently but warns you actively — because a B2C invoice wrongly issued net is an expensive classic: you then owe the VAT.
Transparency instead of a black box
Every decision shows the category, rate and reason — in the editor, live, before you issue. You can deliberately override (e.g. for special cases); the validation then checks the consistency of your choice. What CoolHanX never does: guess a rate and keep it from you.
Three cases from practice
- Freight forwarder, sea freight Hamburg → Busan: cross-border transport — 0%, category and legal note automatic; the freight customer in Korea does not need to see any German VAT.
- IT consulting for a customer in Amsterdam (with a NL USt-IdNr): Reverse Charge AE, net, §13b note — and the USt-IdNr is checked formally before it appears on the document.
- Supply of goods to private customers in Austria: NO Reverse Charge — CoolHanX warns that without a USt-IdNr, German or, where relevant, OSS taxation applies.
Frequently asked questions
Does CoolHanX check my customers’ USt-IdNr?
Formally, always (country format, check-digit logic). The official online confirmation (VIES/BZSt) is included as a free format check in the tool; the qualified confirmation remains the operator’s/firm’s task.
Can I set tax rates manually?
Yes — the suggestion can be overridden. Issuing then validates the consistency (category ↔ rate ↔ totals).
Does CoolHanX take over my tax assessment?
No. The automation covers the standard cases and shows its reasoning; the binding assessment is your tax advisor’s — especially for special cases such as chain transactions, OSS or construction services.
What about 7% — how does the system know?
From the type of service on your line item (e.g. „reduced“). Your items in the catalog carry the type of service, so it’s automatically correct on reuse.
Mixed invoices — 19% and 7% together?
Yes — one type of service per line item; the tax breakdown (BG-23) separates the rates automatically and totals correctly.
Kleinunternehmer under §19 UStG?
Then you issue without showing VAT — you set up the appropriate category and legal note once; the applicability is confirmed by the firm.
What happens when tax rates change?
CoolHanX maintains rates and rules centrally — your items carry only the type of service, never hard-coded percentages.
The VAT categories (UNCL 5305) — what they mean
Every invoice line item carries a VAT category per the UNCL 5305 code key, which is carried through in the e-invoice. It determines the rate and the mandatory note — and is a required detail so that the recipient can post the transaction correctly.
| Code | Meaning | Typical case |
|---|---|---|
| S | Standard rate | 19% / 7% domestic |
| AE | Reverse charge | B2B service to an EU customer with USt-IdNr (§13b) |
| K | intra-community supply | tax-exempt supply of goods to the EU |
| G | export supply | export to a third country |
| E | tax-exempt | e.g. certain services under §4 UStG |
| O | outside the scope | service outside German VAT |
Intra-community, export, §13b — the difference matters
For cross-border transactions, the constellation determines the treatment: a supply of goods to the EU to a business with a valid USt-IdNr is tax-exempt as an intra-community supply (category K) and must be reported in the recapitulative statement (ZM). A service to an EU business shifts the tax liability to the recipient (Reverse Charge, AE). A supply to a third country is an export (G). CoolHanX distinguishes these cases based on the type of service, country and USt-IdNr — and sets the appropriate mandatory note instead of guessing a rate.
Checking the USt-IdNr — formally instant, qualified via the BZSt
For the tax exemption of intra-community transactions, the customer’s valid USt-IdNr is central. CoolHanX checks the format instantly (country prefix, structure). The qualified confirmation (name, address) is obtained via the Federal Central Tax Office (BZSt); document this query, because in case of doubt it is your evidence. If the USt-IdNr is missing, CoolHanX does not apply Reverse Charge silently but alerts you to it.
Related topics
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