Interim and final invoices as XRechnung
An interim invoice requests part of the agreed remuneration before the entire service has been completed and invoiced. At the end, the final invoice bills the entire service and deducts the interim payments already made, including VAT. Since the introduction of mandatory e-invoicing, the e-invoicing rules apply to both, and in XRechnung the invoice type code (BT-3) indicates which kind of invoice it is.
What is an interim invoice?
With an interim invoice, you request payment for part of an order, typically according to construction progress, milestones or at fixed intervals. This is common for construction work, plant engineering, and planning and IT projects, i.e. wherever a lot of time and money lies between the order and completion. The interim invoice is provisional: the final settlement only takes place with the final invoice.
In everyday use, the terms are often confused. This is how to distinguish them:
- Advance payment invoice: payment before the start or before performance of the service.
- Interim invoice: payment for part of the order during performance, without any part having been finally accepted.
- Partial invoice: invoice for a completed, independent partial service. Many people, however, also use the term synonymously with interim invoice.
- Partial final invoice: final settlement of an accepted part, especially in construction.
- Final invoice: final settlement of the entire service after completion.
VAT on interim and advance payments
If you receive money before the service has been performed, VAT already arises at the end of the advance return period in which the money is received (§ 13(1) no. 1(a) sentence 4 UStG, the German VAT Act). An interim or advance payment invoice must therefore also contain all the mandatory details of an invoice and show the VAT (§ 14(5) sentence 1 UStG). The customer can deduct the input tax as soon as both the invoice and the payment are available.
The e-invoicing obligation also applies to advance payment invoices. The BMF (Federal Ministry of Finance) expressly clarified this in its letter of 15 October 2025 (BMF). Between domestic businesses, the same transition periods apply as for normal invoices.
The final invoice with interim payments
In a final invoice, the partial payments received before performance and the tax amounts attributable to them must be deducted if invoices were issued for them (§ 14(5) sentence 2 UStG). Otherwise, you owe the VAT on the interim payments twice: once from the interim invoice and once from the final invoice.
Sample calculation
An order worth 30,000 euros net, VAT at 19 percent. There are two interim invoices, both of which have been paid.
| Invoice | Net | VAT 19% | Gross |
|---|---|---|---|
| Interim invoice 1 | €10,000.00 | €1,900.00 | €11,900.00 |
| Interim invoice 2 | €10,000.00 | €1,900.00 | €11,900.00 |
| Total service as per final invoice | €30,000.00 | €5,700.00 | €35,700.00 |
| less interim payments made | €20,000.00 | €3,800.00 | €23,800.00 |
| Remaining amount | €10,000.00 | €1,900.00 | €11,900.00 |
Important: deduct the net amount and the tax separately. If you only deduct the gross amount of the interim payments from the final amount, you show too much VAT in the final invoice.
A template for a final invoice with interim payments therefore contains, in addition to the usual mandatory details, the total service, a list of all interim invoices with number, date, net amount and tax amount, and the remaining balance.
The final invoice as an e-invoice
This is where it gets tricky. The EN 16931 data model has no field in which the deducted partial payments and tax amounts can be fully represented. According to the Bundessteuerberaterkammer (Federal Chamber of Tax Advisers), the BMF therefore recommends creating a balance invoice for the amount remaining after deduction of the interim payments. Alternatively, the missing details of a final invoice can be embedded in the e-invoice as an attachment (BStBK FAQ).
For the example, this means: the e-invoice only shows the outstanding 10,000 euros net and 1,900 euros VAT. You name the preceding interim invoices as a reference, for example via the preceding invoice reference (BG-3) or a note in the free text (BT-22). According to the same source, a simplification applies to construction work until 30 June 2030: partial payments and tax amounts may be included in an unstructured attachment if the structured part refers to it.
Invoice types in XRechnung
You enter the invoice type in field BT-3. The codes come from the UNTDID 1001 list. Via rule BR-DE-17, XRechnung provides for the following codes; other codes lead to a warning during validation:
| Code | Meaning | Use |
|---|---|---|
| 326 | Partial invoice | Invoice for a partial service |
| 380 | Invoice | Standard case, also for advance payment and balance invoices |
| 381 | Credit note | Settlement issued by the recipient of the service |
| 384 | Corrected invoice | Correction of an invoice already issued |
| 389 | Self-billed invoice | Invoice issued by the customer on behalf of the supplier |
| 875 | Interim invoice (construction) | Interim payments according to construction progress |
| 876 | Partial final invoice (construction) | Invoice for an accepted construction phase |
| 877 | Final invoice (construction) | Final settlement of construction work |
Code 386 for prepayment invoices does exist in the code list, but it is not intended for XRechnung. For advance payment invoices outside construction, the Bundessteuerberaterkammer therefore recommends code 380 with a note such as "Anzahlungsrechnung" (advance payment invoice) in free text field BT-22. For construction work, use codes 875 to 877. Large clients such as Deutsche Bahn often also specify the invoice types and details to be used. Find out more in the article XRechnungen to Deutsche Bahn.
Interim payments and final invoices in faktoora
In faktoora, each interim and final invoice is a separate invoice with its own invoice number and its own service period. You map percentage-based interim payments via the quantity, for example 0.8 for 80 percent of a line item, and you enter the numbers of earlier interim invoices as a reference. You can find step-by-step instructions, including retention and cancellation, in the help article Interim payments, partial invoices and final invoices. The page Create e-invoices shows how to then output the invoice as XRechnung or ZUGFeRD.
Frequently asked questions
What is an interim invoice?
An invoice for part of the agreed remuneration, issued while an order is being carried out. It is provisional; the final settlement is made with the final invoice.
Does an interim invoice have to show VAT?
Yes. If money is received before the service is performed, VAT already arises when the payment is received. The interim invoice therefore needs all mandatory details, including the tax amount.
How do I deduct interim payments in the final invoice?
The net amount and VAT of the paid interim payments are deducted separately from the total service. For an e-invoice, the BMF recommends a balance invoice for the remaining amount with a reference to the interim invoices.
Which invoice type applies to an interim invoice in XRechnung?
For construction work, code 875. Outside construction, 380 with a note in the free text is usually used for advance payments, and 326 for invoicing a partial service.
Do I need an e-invoice for interim invoices?
Yes, between domestic businesses, the e-invoicing obligation also applies to advance payment and interim invoices, with the same transition periods until the end of 2026 or the end of 2027.