Invoice issued by mistake - how to correct?
In economic practice, it may happen that the entrepreneur issues two separate invoices documenting one transaction. What to do in such a situation - issue a correction, or can an invoice issued by mistake be canceled? It turns out that how to fix this bug depends on when it was first noticed.
Invoice issued by mistake and not marketed
If the fact of issuing two invoices for one transaction was noticed before the introduction of at least one of them to legal circulation, then it is possible to cancel it.
Such action, although it does not arise directly from the VAT Act, is accepted by the tax authorities. However, it is important that the four conditions, developed by the existing jurisprudence, concerning an invoice issued by mistake are met:
- the invoice has not been introduced into legal circulation (it has not been transferred or made available to the client),
- the invoice does not reflect a real economic event (e.g. there was no documented sale),
- the issuer of the invoice has both its copies - intended for the buyer and the second - for the seller (formerly the original and a copy),
- the issuer will make an annotation on the invoice indicating that it has been canceled and will state the reason.
The invoice has not been introduced into legal circulation if it has not been collected by the buyer.
The canceled invoice (which must be kept in the documentation) should contain an appropriate note, for example: "canceled on June 1, 2016 - transaction previously invoiced".
Invoice issued by mistake sent to the recipient
The procedure is different if the entrepreneur becomes aware of the fact of issuing two invoices for one transaction after handing over both copies to the buyer. In such a situation, one of the above-mentioned the conditions allowing for the cancellation of the sales document (failure to enter legal transactions) are not met, therefore such proceedings are not possible. So what can you do?
In this case, it will be necessary to issue a correcting invoice. Due to the fact that it will be a reducing sales adjustment, the seller will be able to reduce the VAT due only when he receives a confirmation from the buyer that he has received a correcting invoice.
At this point, it is worth emphasizing that for accounting purposes, the following will be important:
- for income tax - date of the original event,
- for VAT - the date of confirmation of receipt of the correcting invoice by the buyer.
Confirmation of receipt of the correcting invoice by the buyer may take any form - e.g. by e-mail or postal confirmation of receipt.