Navigation path

Additional tools

Frequently Asked Questions for Traders

What are the new VAT invoicing rules?

  • 1.1 What is an invoice?
  • 1.2 Who can supply invoices?
  • 1.3 When must an invoice be issued?
    • 1.3.1 Situation 1 - BtoB supplies
    • 1.3.2 Situation 2 - BtoC supplies
    • 1.3.3 Specific rules for supplies made in or to some Member States
  • 1.4 What information must an invoice contain?
    • 1.4.1 Obligatory information for all invoices
    • 1.4.2 Supplementary information required in certain cases
    • 1.4.3 Simplified invoices
    • 1.4.4 What currency must appear on the invoice?
    • 1.4.5 Additional information that Member States may (and may not) require on invoices
      • 1.4.5.1 Information required by VAT legislation
      • 1.4.5.2 Information required by other legislation (not VAT legislation)
      • 1.4.5.3 Signatures of invoices
    • 1.4.6 My invoice is in a foreign language
  • 1.5 What if I need to change an invoice?
  • 1.6 What are the time limits for issuing invoices?
  • 1.7 Can I issue a summary invoice?
  • 1.8 Can someone else (apart from the supplier) issue invoices?
    • 1.8.1 Invoice issued by a third party (outsourcing)
    • 1.8.2 Invoice issued by the recipient of the supply (self-billing)
    • 1.8.3 The person supplying the invoice (third party or client) is established outside the European Union
  • 1.9 I don't have a VAT identification number!

VAT e-invoicing rules

  • 2.1 What is e-invoicing?
  • 2.2 What are the conditions for electronic invoices?
    • 2.2.1 How do I provide these guarantees?
      • 2.2.1.1 What is an advanced electronic signature?
      • 2.2.1.2 What is electronic data interchange?
      • 2.2.1.3 What about other electronic means?
    • 2.2.2 Transitional measures
  • 2.3 Can I send e-invoices in batches?
  • 2.4 Can I 'post' e-invoices on a website that my client can access?

Storing VAT Invoices

  • 3.1 What information must I store for invoices?
    • 3.1.1 General rules
    • 3.1.2 Member State specific rules
  • 3.2 Who may store the invoices?
  • 3.3 Where may I store the information?
    • 3.3.1 Storage that does not comply with these conditions
    • 3.3.2 Invoices stored outside a Member State's territory
    • 3.3.3 Traders not established in the Member State where they make a supply
  • 3.4 How must I store the information?
  • 3.5 How long must I store the information?
  • 3.6 Tax Administrations' right to access to information

To which supplies do the new rules apply

  • 4.1 Do these rules apply to imports and exports?

Glossary

What are the new VAT invoicing rules?

1.1 What is an invoice?

  • An invoice may be any document in paper or electronic form, no matter what its title or function, that may serve to obtain a VAT deduction for a taxable person, provided that the conditions laid down in the Directive are fulfilled.
  • There are no specific requirements on the format of an invoice.

1.2 Who can supply invoices?

Invoices can be issued by:

  • the supplier (the person who supplies the goods or services);
  • the purchaser (the person who receives the supplies); or
  • a contractor (outsourcing to a third party to the transaction who is engaged to issue invoices).

See 1.8 Can someone else (apart from the supplier) issue invoices? for rules about invoices issued by other people than the supplier.

In all cases, the supplier is responsible for the issue of the invoice and its contents.

1.3 When must an invoice be issued?

There are two main situations when an invoice must be issued:

  • business to business ('BtoB') supplies; and
  • certain business to consumer ('BtoC') supplies.

Additionally, specific rules may be laid down by a Member State for supplies made in that Member State.

In all cases, an invoice must be issued for deposits (sometimes called 'partial payments') as well as for full payments.

1.3.1 Situation 1 - BtoB supplies

Invoices must be issued by a taxable person whenever goods or services are supplied to:

  • another Taxable person; or
  • a non-taxable legal person (corporations, associations, etc who do not charge VAT).

1.3.2 Situation 2 - BtoC supplies

Invoices must be issued by a taxable person when certain goods are supplied to a non-taxable person:

  • certain cases of distance selling (see article 28b(B)(1) of Directive 77/388/EEC); and
  • supplies of certain new means of transport (see article 28c (A) of Directive 77/388/EEC).

1.3.3 Specific rules for supplies made in some Member States

In certain cases, Member States may increase or reduce invoicing obligations.

  1. Member States may increase invoicing obligations; by providing additional cases when an invoice must be provided (other than those covered by situations 1 and 2). They can do so for example for supplies to private individuals (other than those listed under 1.3.2).
    In this case, the invoices do not necessarily need to contain all the information required for VAT invoices. See 1.4 What information must an invoice contain?
  2. Member States may reduce invoicing obligations, by not requiring that an invoice be issued for certain supplies.

They can do so for:

  • article 13 exempt supplies and
  • some exempted supplies with a right of deduction (so-called "zero-rated" supplies).

1.4 What information must an invoice contain?

1.4.1 Obligatory information for all invoices

An invoice must contain the following information:

  1. the date of issue;
  2. a sequential number that uniquely identifies the invoice;
  3. the supplier's VAT identification number;
  4. the customer's VAT identification number (only when the customer is liable to pay the tax on the supply);
  5. the supplier's full name and address;
  6. the customer's full name and address;
  7. a description of the quantity and nature of the goods supplied or services rendered;
  8. the date of the supply or payment (if different from the date of supply);
  9. the VAT rate applied;
  10. the VAT amount payable;
  11. a break-down of the VAT amount payable per VAT rate or exemption;
  12. the unit price of the goods or services exclusive of tax, discounts or rebates (unless included in the unit price);

1.4.2 Supplementary information required in certain cases

In some cases, additional information must be included on the invoice:

  1. where:
    • the supply is exempted; or
    • the customer is liable to pay the tax (the supply is subject to the 'reverse charge procedure');

      the invoice must contain

      • a statement explaining that this is the case; or
      • a reference to the appropriate (Community or national) legislation that deems the supply exempt or subject to the reverse charge procedure;
  2. where the intra-Community supply of a new means of transport is involved, the particulars specified in Article 28a(2) of Directive 77/388/EEC (for example, for a car: its age and its mileage);
  3. where the margin scheme is applied,
    • a statement explaining that this is the case; or
    • a reference to the relevant (Community or national) legislation; and
  4. where the person liable to pay the tax is a tax representative, his VAT identification number, full name and address.

Note 1: Member States cannot require that any additional information appear on an invoice as a precondition to the right to deduct VAT . See 1.4.5 Additional information that Member States may (and may not) require on invoices.

Note 2: for paragraphs (a) and (c) above, the choice whether to:

  • make a statement; or
  • refer to the appropriate (Community or national) legislation on the invoice is a business decision.

Note 3: businesses can provide any additional information on invoices at their own discretion (depending on business practices).

1.4.3 Simplified invoices

In certain situations, Member States may simplify invoicing rules for supplies taking place on their territory. For example, invoices for small amounts, taxi fares and tolls. These specific rules are laid down in national legislation.

1.4.4 What currency must appear on the invoice?

The amounts on invoices may be expressed in any currency.

However, the amount of tax to be paid must be expressed in the national currency of the Member State where the supply takes place (see 'place of taxable transactions' in Directive 77/388/EEC), using the correct conversion mechanism.

1.4.5 Additional information that Member States may (and may not) require on invoices

1.4.5.1 Information required by VAT legislation

Member States may require that the VAT identification number of the client appear on every invoice (and not only when the client is liable to pay VAT).

They can only impose such a requirement on those traders which are established on their territory.

1.4.5.2 Information required by other legislation (not VAT legislation)

In addition to the obligatory information (see 1.4.1 above) that all invoices must contain, Member States may require (for other than VAT purposes) suppliers established on their territory to include additional information on invoices. However, a person's right to deduct VAT cannot depend on this additional information appearing on an invoice.

1.4.5.3 Signatures on invoices

Member States may not require invoices to be signed. Please note that the e-signature referred to in 2.2.1 How do I provide these guarantees? is only a technical protection measure.

1.4.6 My invoice is in a foreign language

Member States may require translation of the invoice into the national language, if this is necessary for control purposes.

1.5 What if I need to change an invoice?

Sometimes, invoices need to be changed (for example, goods are returned, there is an error in the original invoice...). These changes often appear in 'credit notes' or 'debit notes'.

In this case, the document correcting or changing the original invoice must contain all of the information that an original invoice (see 1.4 What information must an invoice contain?) must contain plus an unambiguous reference to the original invoice.

Members States may allow some of these details to be omitted for supplies

1.6 What are the time limits for issuing invoices?

There are no European-wide rules for time limits on issuing invoices.

Each Member State can set its own rules about time limits for issuing invoices

1.7 Can I issue a summary invoice?

A summary invoice is an invoice that covers several separate supplies of goods or services.

There are no European-wide rules for the issue of summary invoices.

Each Member State can set its own conditions for issuing summary invoices.

1.8 Can someone else (apart from the supplier) issue invoices?

Where the supplier does not issue invoices himself, invoices may be issued by:

  • a third party (where invoicing is outsourced to a contractor); and
  • the customer (self-billing).

Different rules apply in each of these cases.

In all cases, the supplier is responsible for the issuing of the invoice and its contents. In addition, the legislation of the supplier's Member State must be respected.

1.8.1 Invoice issued by a third party (outsourcing)

There are no additional conditions when a third party issues invoices on behalf of the supplier.

1.8.2 Invoice issued by the recipient of the supply (self-billing)

The following conditions apply if the recipient of the supply issues the invoice:

  • both the supplier and the recipient must agree from the outset that the customer will supply the invoice (the agreement procedure);
  • there must be a procedure for the supplier to accept each invoice (the acceptance procedure).

Additional rules on self-billing may be set by Member States, such as the terms and conditions of the agreement and acceptance procedures.

1.8.3 The person supplying the invoice (third party or client) is established outside the European Union

If the person issuing the invoice is established outside the European Union, individual Member States may impose additional conditions.

1.9 I don't have a VAT identification number!

In some Members States, not all traders have an intracommunity VAT number (for example when they only trade domestically). Specific rules apply to determine which VAT number must be indicated on their invoices.

 

 

VAT e-invoicing rules

2.1 What is e-invoicing?

E-invoicing is the ability to issue electronic invoices for VAT supplies instead of paper invoices.

Electronic invoices may be issued at the discretion of the supplier, as long as 2.2 are obeyed. (Member States may not require that additional paper copies be issued.)

E-invoices may be sent using two methods (e-signatures and EDI). Other electronic means may be used in certain cases. See 2.2.1 How do I provide these guarantees?

2.2 What are the conditions for electronic invoices?

Two main conditions must be fulfilled:

  • the customer must accept receipt of invoices by electronic means; and
  • guarantees need to be provided for:
    • the authenticity of the invoice's origin; and
    • the integrity of the invoice's contents.

Member States cannot impose any other obligations or formalities relating to e-invoicing.

2.2.1 How do I provide these guarantees?

There are two ways to guarantee the authenticity of origin and integrity of contents of an invoice:

  • using an advanced electronic signature; or
  • using electronic data interchange.

2.2.1.1 What is an advanced electronic signature?

'Advanced electronic signature' is defined in Article 2(2) of Directive 1999/93/EC of 13 December 1999 on a Community framework for electronic signatures.

An 'advanced electronic signature' is an electronic signature that:

  • is uniquely linked to the person signing it (the 'signatory');
  • is capable of identifying the signatory;
  • is created using means that the signatory can maintain under his sole control; and
  • renders detectable any post-issue changes to the data that it guarantees.

Member States may ask their own suppliers that an advanced electronic signature which is:

  • based on a qualified certificate; and
  • created by a secure-signature-creation device.

These terms are defined in Articles 2(6) and (10) of Directive 1999/93.

2.2.1.2 What is electronic data interchange?

'Electronic data interchange' is defined in Article 2 of 94/820/EC Commission Recommendation of 19 October 1994 relating to the legal aspects of electronic data interchange.

Briefly, it is any electronic interchange based on:

  • an agreed standard;
  • an agreement between the parties (before the invoice is issued); and
  • a message that can be automatically understood and treated by companies without human intervention.

Electronic data exchange is not limited to specific standards, such as 'EDIFACT'.

Member States may require that their own suppliers provide an additional summary document on paper, subject to conditions that they lay down.

2.2.1.3 What about other electronic means?

Other electronic means (e.g. email, fax, etc) may be used subject to acceptance in the national rules of the Member State(s) concerned.

Example:

Eureka Co is a taxable person established in Member State A that makes supplies to Member State B. Eureka Co may only use 'other electronic means' (that is, not advanced electronic signature and electronic data interchange) to guarantee its invoices if both Member States A and B accept the other electronic means.

2.2.2 Transitional measures

Until 31 December 2005, Member States may require that prior notification be given to the relevant administration in the Member State before e-invoicing can occur.

2.3 Can I send e-invoices in batches?

E-invoices may be sent in batches. In this case, the common data (including the digital signature if appropriate) need only be provided once.

2.4 Can I 'post' e-invoices on a website that my client can access?

Invoices may be 'posted' on a website that your clients can access. The Directive only requires that the invoices be 'made available' and not that they be 'sent'.

 

 

 

Storing VAT Invoices

3.1 What information must I store?

3.1.1 General rules

All taxable persons must keep a copy of every invoice:

  • issued by them or on their behalf (by a third party or customer); and
  • that they receive.

3.1.2 Member State specific rules

Alongside these general rules, Member States may impose additional rules for:

  • supplies made in their territory; and
  • invoices received by a taxable person established in their territory.

These rules may require:

  • that the invoice be stored in its original form (paper or electronic);
  • if the invoices are stored electronically, that the data guaranteeing the:
    • authenticity of the invoice's origin; and
    • integrity of its content be stored as well.

3.2 Who may store the invoices?

Invoices must be stored both by the supplier and by the client but both may outsource the storage function to a third party.

3.3 Where may I store the information?

The information may be stored anywhere in the European Union, subject to two conditions. The information must be available:

  • electronically; and
  • online.

Member States may, however, have more flexible rules for supplies that take place on their territory.

Please find below further details regarding information storage.

3.3.1 Storage that does not comply with these conditions

If the storage does not comply with these conditions (for example, paper storage), the Member State where the taxable person is established may require that invoices be stored within that Member State.

3.3.2 Invoices stored outside a Member State's territory

If the invoices are stored outside the Member State where the taxable person is established, then the Member State may require notification of the place of storage.

3.3.3 Traders not established in the Member State where they make a supply

Traders not established in the Member State where they make a supply cannot be required to store their accounting documentation in that territory (even in paper form).

3.4 How must I store the information?

The information must be stored in a manner that guarantees, for the entire storage period:

  • the authenticity of the invoice's origin;
  • the integrity of the invoice's contents; and
  • the readability of the invoice.

No specific format may be required for storage.

3.5 How long must I store the information?

The period for which invoices must be stored is determined by each Member State for:

  • supplies made in their territory; and
  • invoices received by a taxable person established in their territory.

Note that this period can sometimes be found in legislation other than VAT legislation.

3.6 Tax Administrations' right to have access to information

Tax administrations of one Member State have a right (for control purposes) to access, download and use electronic invoices that are stored electronically in another Member State when:

  • a taxable person is established in the first Member State; and
  • that taxable person is storing his invoices electronically in the second Member State.

 

 

To which supplies do the new rules apply?

These new rules are applicable to all supplies made within the territory of the European Union.

4.1 Do these rules apply to imports and exports?

4.1.1 Exports

These invoicing rules apply to exports of goods, as the place of taxation of exports is within the European Union, even if the supply is exempt from VAT.

4.1.2 Imports

These invoicing rules do not apply to imports of goods.

Article 23 of Directive 77/388/EEC (which refers to Customs legislation) lays down specific obligations for imports.

 

Glossary

Article 13 exempt supply

This is a supply that is not subject to VAT (so the buyer cannot claim a VAT refund). For example, supplies made by hospitals, doctors or ambulances. See article 13 of Directive 77/388/EEC.

Non-taxable person

This is someone who is not required to be registered by VAT legislation. There are 2 main types of non-taxable persons:

  • non-taxable legal persons - a legal person that does not have to charge VAT on its supplies (ex : a hospital)
  • non-taxable natural persons - final consumers.

See Taxable person.

Taxable person

A taxable person is a person who in the course of this business makes taxable supplies.