Taxable persons (VAT-registered businesses) doing business in the EU are subject to a single set of basic EU-wide VAT invoicing rules and, in certain areas, national rules set by the individual Member State.
As set out in the VAT Directive:
- Electronic invoices are equivalent to paper invoices.
- Businesses are free to issue electronic invoices subject to acceptance by the recipient. However, for business-to-government (B2G) transactions, public administrations must accept structured electronic invoices.
- Businesses can outsource invoicing operations to a third party or to the customer (i.e. self-billing), in some circumstances.
- Businesses are generally free to store invoices where and how they like (paper/electronic, in a different EU Member State to where they are based, etc.).
For a detailed explanation of EU-wide invoicing, consult the explanatory notes on VAT invoicing.
For specific provisions approved by each EU Member State, visit the Tax Information Communication database.
When is an invoice compulsory?
An invoice is required for VAT purposes under EU rules for most business-to-business (B2B) supplies and for certain business-to-consumer (B2C) transactions. There may also be specific national rules on transactions requiring an invoice.
For B2B supplies, a business must issue an invoice whenever goods or services are supplied to another business or a non-taxable legal entity (e.g. local authorities, associations etc. that do not charge VAT), except:
- Exempt financial & insurance services (Article 135(1)(a)-(g), VAT Directive) – no invoice is required if the service is supplied in another EU Member State. However, Member States may require an invoice where:
- these services are supplied in their own territory or outside the EU and
- the supplier is based in their territory or supplying the services from fixed premises in their territory.
- Other exempt transactions (Article 135(1)(h)-(l), VAT Directive) – Member States may choose not to require an invoice where these transactions are carried out in their territory.
For B2C transactions, a business must issue an invoice when it supplies certain goods to a non-taxable person (generally a private individual) in these cases:
- distance selling when taxable in another EU Member State when the One Stop Shop (OSS) is not used
- new means of transport supplied to another EU Member State (Article 138(2)(a), VAT Directive)
Specific national rules apply in some EU Member States:
- An invoice may be required for supplies to private individuals other than those listed under B2C transactions section above. In such cases, the invoices do not necessarily need to contain all the information required for full VAT invoices.
- No invoice is required for:
- certain exempt transactions (Title IX, Chapters 2-3, VAT Directive)
- exempt transactions with a right of deduction (‘zero-rated’ supplies)
What information must a VAT invoice contain?
| Full invoice | Simplified invoice |
|---|---|
| Date of issue | Date of issue |
| Unique sequential number identifying the invoice | - |
| Supplier’s full name & address | - |
| Customer’s full name & address | - |
| Customer’s VAT identification number (if the customer is liable for tax on the transaction) | Supplier’s VAT identification number |
| Description & quantity of goods or services supplied | Type of goods or services supplied |
| Unit price of goods or services – exclusive of tax, discounts or rebates (unless included in the unit price) | - |
| Date of transaction or payment (if different from invoice date) | - |
| VAT rate applied & amount payable | VAT amount payable (or the information needed to calculate it) |
| Breakdown of VAT amount payable by VAT rate or exemption | - |
| - | Specific, unambiguous reference to the initial invoice and the details that are being amended (on a credit note, debit note or other document treated as an invoice) |
| Extra information required in some cases | |
| For exempt transactions: a reference to the appropriate (EU or national) legislation exempting it, or any other reference indicating it is exempt (at the choice of the supplier) | |
| If the customer is liable for tax (i.e. under the reverse-charge procedure): the words ‘reverse charge’ | |
| For intra-EU supply of a new means of transport: the details specified in Article 2(2)(b) of the VAT Directive | |
| If a margin scheme applies: a reference to the scheme involved (e.g. ‘margin scheme — travel agents’) | |
| Self-billing (customer issues invoice instead of supplier): the words ‘self-billing’ | |
| Person liable for tax is a tax representative: their VAT identification number, full name and address | |
| Supplier is operating a cash accounting system: the words ‘cash accounting’) |
Once all the information above is included on an invoice (depending on the case and EU Member State), the invoice acts as proof that allows the business to deduct VAT in the EU Member State concerned. No EU Member State may prevent this by requiring extra information in the invoice.
Businesses may always include information on their invoices additional to that described above.