EU VAT Invoice Requirements for Businesses

For businesses operating within the EU or engaging in cross-border trade, understanding VAT invoice requirements, as laid down in the EU VAT Directive, is crucial, not least because complying with these regulations ensures smooth financial transactions and avoids penalties. For those unsure about what information should be included in their EU VAT invoices, we’ve put together a simple guide to the key features that businesses need to be aware of.

When do you have to issue a VAT invoice in the EU?

In the EU, the issuance of a VAT invoice is generally required when a taxable supply of goods or services takes place. An invoice should be issued in most cases of B2B transactions (both intra-EU and cross-border) and B2C transactions (distance sales to non-VAT registered individuals). There are certain circumstances where a VAT invoice is not required, some of which are country-specific.

Mandatory information on VAT invoices

While individual EU Member States will have their own additional VAT invoice requirements, all EU VAT invoices are expected to include the following to meet the basic legal standard:

• Supplier details: The supplier's name, address, and VAT number must be clearly stated on the invoice.
• Customer details: The customer's name and address should be added, as should their VAT number when dealing with other VAT-registered businesses.
• Invoice number: Each VAT invoice must have a unique identification number for tracking purposes.
• Invoice date: The date when the VAT invoice was issued should also be stated.
• Description of goods or services: A detailed description of the goods or services supplied, including quantities, unit prices, and applicable VAT rates, must be included.
• VAT amount: The amount of VAT charged should be clearly displayed, along with the applicable VAT rate.
• Total amount: The total invoice amount, including VAT, should be included.
• Currency: The currency in which the invoice is issued must be indicated.
• Proof of intra-EU supply: In cases of cross-border trade within the EU, the VAT invoice should clearly indicate that the transaction is an intra-EU supply, specifying the VAT exemption under the reverse charge mechanism.

Electronic invoicing

An electronic invoice (or e-invoice) is one that can be electronically delivered in a standardized electronic format, allowing for automatic or electronic processing. Under this definition, a PDF or a scanned document cannot be considered an electronic invoice.

Electronic invoices must ensure authenticity, integrity, and readability of the VAT invoice content. The format used should be agreed upon by both the supplier and the customer, and it must be capable of audit trail reconstruction.

From 2028, electronic invoicing will be mandatory in the European Union for both B2C and B2B transactions. Only structured formats, such as XML; UBL; PDF/A3, etc, will be permitted.

Record-keeping obligations

Businesses are legally obliged to keep copies of VAT invoices and related records for a designated period, which may vary between EU Member States but is typically between 6 to 10 years. These records must be readily available for tax authorities' inspection upon request.

Conclusion

Complying with the EU VAT invoice requirements is vital for businesses operating within the EU or involved in cross-border trade. By ensuring the correct information is included on VAT invoices and maintaining proper records, businesses can avoid penalties and navigate the complexities of VAT regulations. It’s advisable for businesses to consult local tax authorities or seek professional advice to ensure compliance with specific VAT regulations in relevant EU Member States.

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