Does every input invoice meet the requirements for deductible input VAT?

One of the very important pieces of information you must have before paying an invoice to your supplier — whether that invoice is in line with the VAT Act and contains all necessary items, so that you as the legal entity receiving the invoice can use the deductible input VAT.

Risk of VAT being challenged in inspection

If each of your input invoices does not have all the mandatory items, a tax inspector can:

• Challenge the recognition of input VAT on that invoice
• Especially in case you initiate a VAT refund procedure

Consequence: additional tax liability, interest, and in the worst case, an infringement.

10 mandatory items of an input invoice

Pursuant to the VAT Act, every invoice must include the following items:

1. Place, date of issue and serial number of the invoice
2. Name and address of the taxpayer performing the turnover (the seller) and their VAT number
3. Name and address of the recipient of the goods, or user of the services (the buyer)
4. Date of the completed turnover
5. Quantity and customary trade name of the goods supplied, or type and quantity of the services performed
6. Amount of consideration for the turnover performed without VAT
7. Applied tax rate
8. Amount of calculated VAT
9. Total amount of consideration for the turnover performed including VAT
10. Signature and stamp of the issuer of the invoice

Practical tip

Before booking and payment, do a quick check of each item:

• Whether the buyer’s company name is correct (without typos)
• Whether the supplier’s VAT number is legible and correct
• Whether all amounts are mathematically correct (base + VAT = total)
• Whether the identification of the turnover is clear (not just “service” but a specific description)

When to return the invoice to the supplier

If any of the above items is missing — return the invoice to the supplier for correction. It is better to wait one day than to risk the VAT being challenged a year later.

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Would you like your accounting team to systematically check compliance of input invoices with the VAT Act? Contact Finance Plus — we check before booking and reduce the risk of challenge in tax inspections.