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Mandatory invoice details

Observing and knowing the information presented on the invoices is an important part of the accountant’s work. Our aim is to provide a brief overview of the laws that regulate the mandatory details of invoices and the requirements of information that must be on the invoice.

 Accounting Act (RPS) § 7.

An invoice is a base document in accounting that certifies the occurrence of an economic transaction. The original document must contain at least the following information about the economic transaction:

  1. time of occurrence
  2. description of economic content
  3. figures such as quantity, price and amount

If the counterparty of an accounting entity is another accounting entity, state accounting  entity or a foreign legal entity, then the invoice submitted for the transfer of goods or the provision of services must also contain the invoice number or other identification code and data that will enable both parties to identify the transaction.

In addition, the original document must be machine-processable, but may also be in another form that allows for written reproduction. Written production might be necessary , when  one transaction party does not have the possibility of handling a machine-processable invoice and creating this possibility requires great expenditure or effort from them.

Value Added Tax Act (KMS) § 37 subsection 7

Based on the VAT Act, invoices must contain the following information:

  1. serial number and date of issue of the invoice
  2. taxpayer’s name, address, taxpayer registration number
  3. name and address of the purchaser of the goods or recipient of the service
  4. registration number of the purchaser of the goods or recipient of the service as a taxable person, if he has a tax liability when purchasing the goods or receiving the service
  5. the name or description of the goods or services
  6. quantity of goods or volume of service
  7. the date of issue of the goods or provision of the service or the date of receipt of partial or full payment for the goods or service, if it is determinable and different from the date of the invoice
  8. the price of goods or services without VAT and a discount if it is not included in the price
  9. taxable amount by VAT rates with applicable VAT rates or tax-free turnover amount
  10. the amount of VAT payable

Credit invoices must include all the above requirements and must also include a reference to the original invoice.

It should also be mentioned that the taxable person is obliged to issue an invoice in case of transfer of goods or provision of services within seven calendar days, counting from the day of dispatch of the goods. Turnover may also occur upon receipt of partial or full (advance) payment for goods or services, in which case the invoice must be issued within seven calendar days after receiving the goods. In the case of intra-Community turnover of goods or the provision of services to a taxable person in another Member State, the invoice must be issued by the 15th day of the calendar month following the dispatch or making available of the goods or provision of the service. Based on the VAT Act the invoice may be issued electronically only with the buyer’s consent, otherwise the invoice is issued in paper form.

The Value Added Tax Act Clauses 1 – 8 of § 37 (8) contain additional notes and references that must be added to the invoice only in certain cases.

In the case of certain transactions, a reference to the corresponding provision of the VAT Act or the provision of the VAT Directive must be additionally indicated on the invoice, in particular this applies to turnover taxed at a 0% rate (for example intra-Community turnover) or tax-exempt turnover. In the event that the tax liability rests with the purchaser of the goods or the recipient of the service, the note “reverse taxation” must generally be added to the invoice.

In addition, there are specified notes on the special provisions of the VAT Act. Under certain conditions, the invoice can also be created by the buyer, in this case the invoice must include a comment “self-invoicing”.

In the following cases it is possible to issue invoices that meet the simplified requirements, if the invoice is issued:

  • during passenger transport services
  • through a parking machine
  • automatic gas station payment terminal, etc.

This primarily means that even the taxable person who receives the service can use an invoice that meets only the requirements of a simplified invoice as a basis for deducting input VAT. It can be issued if the amount on the invoice does not exceed 160 euros without VAT.

On the simplified invoice, the issuer must indicate:

  • date of the invoice
  • name of the goods or service
  • name of the taxable person
  • registration number of the taxable person
  • taxable amount
  • VAT amount

A taxable person to whom a simplified invoice is issued is required to enter only his name and his registration number as a taxable person on the invoice (KMS § 37 paragraph 11).

Commercial Code and Consumer Protection Act

Both the Commercial Code and the Consumer Protection Act outline important details regarding invoice issuance. Section 15(2) of the Commercial Code requires that the business’s commercial register code be included on all business documents, including invoices. According to § 4 of the Consumer Protection Act, upon immediate payment for goods or services, the trader must provide the consumer with a document certifying the sale of goods or the provision of services. This document must be in writing or in a form that allows for written reproduction and must include at least the following information:

  1. the name or business name of the trader and the address of the place of business
  2. date of sale of goods or provision of services
  3. the name and price of each good or service and the amount paid

If the amount to be paid by the consumer is less than 20 euros, a document proving the provision of goods or services will be provided only upon the consumer’s request. In cases where goods are sold or services are provided under a duration contract, the trader may forgo submitting a physical invoice if the consumer has agreed to receive the invoice through the trader’s electronic data carrier.