Question 1

Do I have to issue an invoice for every billing cycle?

Accepted Answer

Not always. Under the EU's OSS scheme, there's often no EU-level obligation to issue a B2C invoice at all (though some member states choose to require one), while B2B sales generally do need one. In the UK, a supplier billing continuous services by direct debit can issue a single VAT invoice covering up to a year of payments under Reg. 90 of the VAT Regulations 1995, accounting for VAT per due date instead of per cycle.

Question 2

What VAT do I charge on subscriptions sold to customers in other EU countries?

Accepted Answer

It depends on who's buying. For B2C sales, VAT is due at the customer's country rate (not yours) once you're registered under the OSS scheme — enter that rate in this tool's tax field. For B2B sales to a VAT-registered business, the reverse charge applies instead: you charge 0% VAT, show both VAT numbers, and add a "reverse charge" note under Article 44/196 of the EU VAT Directive — the customer self-accounts for the tax in their own country.

Question 3

How do I show proration on an invoice?

Accepted Answer

List the new charge for the remaining part of the cycle on its own line (e.g. "Additional seats (prorated, 15–31 May)"), and any credit for unused time on the old plan as a separate negative, non-taxable line. The invoice total nets the two together automatically.

Question 4

Is SaaS taxable in my state?

Accepted Answer

In the US it varies by state — around 25 states tax SaaS (for example New York treats it as prewritten software, Texas as data processing), while California and most others exempt it. Texas only taxes 80% of the charge (its data-processing exemption covers the other 20%), and Connecticut charges a lower 1% rate for business use versus 6.35% for personal use. Check your state's current rule and your nexus status before charging tax.

Question 5

Does each recurring invoice need a new invoice number?

Accepted Answer

Yes — every billing cycle needs its own unique, sequential invoice number. Never reuse a number across renewal periods; a per-period numbering series (e.g. 2026-05-001) works well and satisfies EU sequential-numbering rules (Art. 226(2)).

Question 6

What's the difference between a subscription invoice, a receipt, and a billing statement?

Accepted Answer

The invoice is issued for a billing cycle and states what's owed and by when. A receipt confirms payment has already been received. A billing statement typically summarizes multiple invoices or charges over a longer period (useful for enterprise accounts reconciling several subscriptions at once).

Question 7

Do I need to show the next billing date or auto-renewal terms on the invoice?

Accepted Answer

It's best practice rather than a universal legal mandate on the invoice itself — this tool's "Next billing date" field plus a renewal-terms note in the notes field cover it. Separately, consumer-protection law (like the US ROSCA and state auto-renewal laws, or Germany's cancellation-button requirement) governs disclosure at signup and in your account UI, not the invoice.

Question 8

How do I invoice an annual plan paid upfront?

Accepted Answer

Issue a single invoice with a 12-month billing period (from–to) and the full annual amount as one line item. The tax point is generally the earlier of the invoice date or the payment date.

Question 9

What is a qualified invoice (適格請求書) for subscriptions in Japan?

Accepted Answer

Japan's qualified invoice system requires the seller's registration number (T + 13 digits), subtotals shown separately per tax rate, and rounding of the consumption tax performed once per tax-rate category for the whole invoice — never rounded line by line.

Question 10

Can I invoice in USD or EUR if my customer is abroad?

Accepted Answer

Yes — but where VAT rules require it (EU/UK Art. 230), also show the VAT amount converted into the local currency of the customer's member state, in addition to your invoice currency.

Question 11

Why is the proration credit a negative line instead of a discount?

Accepted Answer

A discount reduces the whole invoice; a proration credit is tied to a specific unused period on a specific prior plan, so it needs its own description and its own (non-taxable) amount. Modelling it as a negative line keeps that detail visible on the invoice while still netting correctly into the total due.

Opis	Količina	Cena	Znesek
Pro Plan — monthly subscription (billing period above)	1	€0.00	€0.00
Additional seats (prorated)	1	€0.00	€0.00
Credit — unused time on previous plan (prorated)	1	€0.00	€0.00
Usage overage — API calls / storage above included quota	1	€0.00	€0.00
Premium support add-on (monthly)	1	€0.00	€0.00
One-time onboarding & setup fee	1	€0.00	€0.00

Vmesni seštevek	€0.00
DDV (22%)	€0.00

Skupaj	€0.00

Subscription Invoice Generator

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