Key takeaways
- VAT invoices are mandatory for most B2B transactions and some B2C sales within the EU, and must include specific details such as invoice date, supplier and customer information, VAT rates, and total amounts.
- Different invoice types exist depending on the nature and value of the transaction, including full, simplified, self-billing, reverse charge, and margin scheme invoices—each with its own set of requirements.
- Electronic invoicing will become mandatory for cross-border B2B transactions in the EU from 1 July 2030, requiring businesses to use structured formats and comply with digital record-keeping obligations.
In short: An EU VAT invoice must show the invoice date and number, plus the supplier’s and customer’s details and VAT numbers. It must also describe the sale and show the VAT rate and total amounts. Only VAT-registered businesses can issue VAT invoices. Under the EU VAT Directive, you need one for most B2B sales and some B2C sales.
Is your business operating within the EU, or do you trade across borders? Then you need to understand the VAT invoice requirements in the EU VAT Directive. Following these rules keeps payments smooth and helps you avoid penalties. Only VAT-registered businesses can issue VAT invoices. This simple guide covers the key details your EU VAT invoices must include.
What is a VAT invoice?
A VAT invoice is a document that records a sale of goods or services and shows the amount of Value-Added Tax (VAT) charged. A VAT invoice has several purposes. It gives a record of the sale and makes the VAT charged clear. It also lets businesses reclaim the VAT they paid on their purchases. When you issue a VAT invoice, you charge VAT to your customers correctly. This keeps you compliant and your finances running smoothly.
When do you have to issue a VAT invoice in the EU?
In the EU, you must issue a VAT invoice when a taxable supply of goods or services takes place. You should issue a VAT invoice in most B2B sales, both within the EU and across borders. The same applies to B2C sales to people who are not VAT registered. In some cases, a VAT invoice is not required, and some of these cases depend on the country.
What types of EU VAT invoice are there?
The EU has several types of VAT invoice: full, simplified, self-billing, pro forma, reverse charge, intra-community supply and margin scheme invoices. Each type has its own requirements. These depend on the type of sale, the parties involved, and the goods or services. Here are the most common types of EU VAT invoices:
Full VAT invoice
- Purpose: The full VAT invoice is the most complete invoice. You use it for B2B (business-to-business) sales and for higher-value B2C (business-to-consumer) sales.
- Requirements:
- Date of issue
- Unique invoice number
- Supplier’s name, address, and VAT identification number
- Customer’s name, address, and (for B2B) VAT identification number
- Description of goods or services supplied
- Quantity or volume
- Date of supply of goods or services (if different from the invoice date)
- Price per unit excluding VAT, discounts, and rebates
- VAT rate(s) applied
- Total VAT amount payable
- Total amount payable, inclusive and exclusive of VAT
Simplified VAT invoice
- Purpose: The simplified VAT invoice is for lower-value sales, typically less than €100, depending on local VAT rules. You can also use it for B2C sales.
- Requirements:
- Date of issue
- Unique invoice number
- Supplier’s name, address, and VAT identification number
- Description of goods or services
- VAT amount payable or sufficient information to calculate it
- Total amount payable, including VAT
Self-billing invoice
- Purpose: With a self-billing invoice, the customer issues the invoice on behalf of the supplier. It’s typically used in certain industries or contracts where the supplier allows the buyer to issue invoices.
- Requirements: Same as a full VAT invoice, but it must clearly state "Self-billing."
Pro forma invoice
- Purpose: A pro forma invoice is a draft bill of sale sent to buyers before a shipment or delivery. It’s not a true VAT invoice. Instead, it shows what the final invoice will contain. VAT isn’t typically charged at this stage.
- Requirements: It should clearly state that it is a “Pro forma invoice” and is not to be considered an official VAT invoice.
Reverse charge invoice
- Purpose: A reverse charge invoice is for cross-border (intra-community) sales within the EU, or for certain services. In these cases, the buyer is liable for the VAT, often in B2B sales.
- Requirements:
- All details of a full VAT invoice
- A statement that reverse charge applies (e.g., "Reverse charge: VAT to be accounted for by the recipient")
Intra-community supply invoice
- Purpose: An intra-community supply invoice is for sales of goods between EU countries. No VAT is charged because the goods are moving from one EU country to another.
- Requirements:
- All details of a full VAT invoice
- VAT exemption reference (e.g., "Intra-Community supply, VAT exempt under Article 138 of the VAT Directive")
Margin scheme invoice
- Purpose: A margin scheme invoice is for goods sold under special VAT schemes, such as second-hand goods, works of art, and collector's items. VAT is charged only on the profit margin, not the full sale value.
- Requirements:
- All details of a full VAT invoice
- A reference to the margin scheme being applied (e.g., "Margin Scheme – Second-Hand Goods")
What is electronic invoicing?
An electronic invoice (or e-invoice) is an invoice sent in a standard electronic format that allows automatic processing. Under this definition, a PDF or a scanned document is not an electronic invoice.
An electronic invoice must keep the VAT invoice content authentic, intact and readable. The supplier and the customer should agree on the format. The format must also allow an audit trail to be rebuilt.
VAT-registered businesses must follow digital record-keeping rules to meet their legal obligations.
Under the EU’s VAT in the Digital Age (ViDA) package, electronic invoicing will be mandatory for cross-border B2B transactions from 1 July 2030. EU countries can also make e-invoicing mandatory for domestic sales. Only structured formats, such as XML and UBL, will be permitted.
How long must you keep VAT invoices?
You must keep copies of VAT invoices and related records for a set period, typically between 6 to 10 years. This period may vary between EU member states. Your records must be ready for tax authorities to inspect on request.
How do you stay compliant with EU VAT invoice rules?
To stay compliant with EU VAT invoice requirements, include the correct information on every VAT invoice and keep proper records. This matters for any business operating within the EU or trading across borders. It helps you avoid penalties and handle complex VAT regulations. It's a good idea to ask local tax authorities or a professional for advice on the rules in each relevant EU member state.
Do you need help with your VAT compliance? Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.
How Taxually handles this
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Frequently asked questions
What is a VAT invoice and why is it important?
A VAT invoice is an official document that records the sale of goods or services and specifies the amount of Value-Added Tax (VAT) charged. It ensures transparency, allows businesses to reclaim VAT, and helps maintain compliance with EU VAT regulations.
When must a business issue a VAT invoice in the EU?
EU businesses must issue VAT invoices when making taxable supplies of goods or services, especially for B2B and most cross-border transactions. In some cases, specific countries may have exemptions for small-value or B2C transactions.
What information must be included on a VAT invoice?
A valid EU VAT invoice must include details such as the supplier and customer’s VAT numbers, invoice date and number, goods or services description, VAT rate, total VAT amount, and total payable amount. Missing or incorrect information can lead to compliance issues or rejected VAT claims.
What is the difference between a full VAT invoice and a simplified VAT invoice?
A full VAT invoice is used for B2B or high-value transactions and includes detailed information about both parties and the sale. A simplified VAT invoice, used for smaller transactions, contains only essential information such as supplier details, VAT amount, and total payable.
What are the new EU e-invoicing rules?
From 1 July 2030, electronic invoicing will become mandatory across the EU for cross-border B2B transactions, under the VAT in the Digital Age (ViDA) package. EU countries can also make e-invoicing mandatory for domestic sales. Businesses will be required to issue e-invoices in structured formats like XML or UBL to ensure data integrity, readability, and compliance with digital record-keeping standards.
