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VAT invoices - which can occur in business transactions?

VAT invoices are commercial documents confirming business transactions between the seller and the buyer. In business transactions - apart from standard documents of this type - there are also other types: VAT invoice, margin, advance invoice, settlement (final) invoice, pro forma invoice, corrective invoice and invoice issued by an exempt taxpayer.

"Normal" Sales Invoices

The basic document of the sale is the invoice confirming the standard transaction between the seller and the buyer. Importantly, from January 1, 2014, the Act on tax on goods and services includes the exact definition of an invoice.

Article 2 of the VAT Act:

Whenever further provisions refer to: (...)

31) invoice - it shall be understood as a document in paper or electronic form containing data required by the Act and regulations issued on its basis (...).

In light of the above definition, it is extremely important that the invoice includes all elements specified in the regulations. Pursuant to Art. 106e paragraph. 1 of the VAT Act, the elements of the invoice are:

date of issue,
a sequential number assigned within one or more series that uniquely identifies the invoice,
names and surnames or names of the taxpayer and buyer of goods or services and their addresses,
the number by which the taxpayer is identified for tax purposes,
the number by which the buyer of goods or services is identified for the purposes of tax or value added tax under which he received the goods or services,
the date of the delivery or completion of the delivery of goods or the performance of the service or the date of receipt of payment, if it occurred before the sale, if such date is specified and differs from the invoice issue date,
name (type) of goods or services,
measure and quantity (number) of delivered goods or scope of services rendered,
unit price of a good or service without the tax amount (net unit price),
the amount of any price discounts or reductions, including in the form of an early payment discount, unless they have been included in the net unit price,
value of the goods delivered or services performed, covered by the transaction, without the tax amount (net sales value),
tax rate,
the sum of the net sales value, with a breakdown into sales subject to individual tax rates and sales exempt from tax,
the amount of tax on the sum of the net sales value, broken down into amounts related to individual tax rates,
the total amount due.

Important!

Since January 2014, the dates for issuing invoices have changed - now the invoice should be issued no later than on the 15th day of the month following the month in which the service was provided or the goods were delivered. Moreover, along with the amendment to the VAT Act, a rule was introduced that the invoice may be drawn up up to 30 days before the delivery of the goods or the performance of the service and receipt - before the delivery of the goods or the performance of the service - all or part of the payment.

Margin VAT invoices

The appearance of VAT invoices does not differ much from regular invoices. They are used in the trade of second-hand goods, works of art, collectors' items and antiques, and in tourist services. As indicated by the VAT Act, the margin is the difference between the amount due that must be paid by the buyer of the service or product and the price paid by the seller when purchasing them from other suppliers.

It is a simplified document, because the seller is not obliged to include information on it regarding:

net unit price,
rebate amounts,
net sales value,
the sum of the net sales value and the tax charged on it,
tax rates.

Importantly, margin VAT invoices do not have to include the amount of the margin.

What should be on such a document? According to the regulations, these will be:

date of issue and subsequent number,
names and surnames or names of the taxpayer and buyer of goods or services and their addresses,
NIP numbers of the seller and the buyer,
Name of product or service,
date of making or completing the delivery of goods or performance of the service (if different from the date of issue),
unit of measure and quantity of goods sold or type of services performed,
total amount due,
in exceptional cases stipulated by the regulations - the terms "cash method" or "self-billing", depending on the nature of the transaction.

Another important element of the VAT invoice, the margin is information about what type of activity the sale relates to:

"Margin procedure for travel agencies" - for tourism services,
"Margin procedure - used goods" - for the delivery of second-hand goods,
"Margin procedure - works of art" - for the delivery of works of art,
“Margin Procedure - Collectors and Antiques” - on delivery of collectors' items and antiques.

Advance and final VAT invoices

An advance invoice is a document that confirms the receipt of the prepayment in whole or in part before the goods are released or the service is provided. It should be drawn up if the seller received a prepayment, advance payment, down payment or installment before the aforementioned events.

Important!

The advance invoice should be issued by the 15th day of the month following the month in which the payment was received. It should also be remembered that the tax obligation arises at the time of receipt of the advance payment, and not the issue of an invoice.

The advance invoice should contain at least:

date of issue,
next number,
names and surnames or names of the seller and buyer and their addresses,
NIP numbers of the seller and the buyer,
the date of receipt of all or part of the payment, if it differs from the date of invoice,
the amount of all or part of the receivables received, and if more than one advance invoice has been issued and these invoices include the entire amount, the last of these (final) invoices should also contain the numbers of previous invoices,
the tax amount calculated according to the formula:

KP = (ZB x SP) / (100 + SP)

where:

KP - the amount of tax,

ZB - means the amount of the received part or all of the receivables,

SP - means the tax rate;

order or contract data, in particular: name (type) of goods or services, net unit price, quantity of ordered goods, net value of ordered goods or services, tax rates, tax amounts and gross value of the order or contract.

If the advance invoice does not cover the entire value of the transaction (sale of goods or services), the seller is obliged to issue a final (settlement) invoice at the time of its implementation. In this case, the sum of the value on the invoice is reduced by the amount of the received part of the receivables, and the tax amount is reduced by the sum of the tax amounts shown on the advance invoices.

Pro forma invoices

At the beginning, it should be emphasized that a pro forma invoice is not an accounting document. It can be used as a calculation of agreed prices or an order, i.e. as a strictly commercial document. Therefore, the fact that a pro forma is issued does not have any consequences in terms of income tax or VAT. Moreover, issuing a pro forma invoice does not release the seller from the obligation to issue an invoice in the above-mentioned time limits (also when an advance payment was made on its basis).

Tax regulations do not regulate the issue of a pro forma invoice, therefore there are no guidelines regarding its features, issuing method or mandatory elements.

As a pro forma invoice is issued in the same way as a sales invoice, it may contain the following elements:

the title "Pro forma invoice" or "Proforma",
date and place of issue,
identification of the issuing entity (seller data),
data of the client for whom the pro forma is prepared,
names of goods / services,
net unit price,
the net value,
VAT rate,
the amount of VAT,
gross value,
the signature of the issuer.

Correcting VAT invoices

Another type is a correction invoice, which is issued by the seller in a situation where, while issuing the original sales invoice, he made a mistake or another event occurred that changed the data on the document. Pursuant to Art. 106j paragraph. 1 of the VAT Act, such a document may be drawn up by an entrepreneur when, after issuing an invoice:

discount was granted,
discounts and price reductions were granted,
goods and packaging have been returned,
all or part of the payment to the buyer has been refunded,
the price has been increased or there has been an error in the price, rate, tax amount or any other item in the invoice.

In accordance with paragraph 2 above article of the VAT Act, the corrective invoice should contain:

the term "CORRECTING INVOICE" or "CORRECTION",
sequential number and date of issue,
the data contained in the original invoice to which the correction relates, as specified in art. 106e paragraph. 1 points 1-6 (date of issue, consecutive number, names and surnames or names of the taxpayer and buyer of the goods or services and their addresses, in certain cases NIP of the seller and the buyer, date of delivery or completion of the delivery of goods or service or the date of receipt of payment, o how much such date is specified and differs from the invoice issuance date) and the name (type) of goods or services covered by the correction,
the reason for the correction,
if the correction affects a change in the tax base or the amount of tax due - the amount of the tax base correction or the amount of the correction of tax due, respectively, broken down into amounts relating to individual tax rates and tax-exempt sales,
in other cases - the correct content of the corrected items,
indication of the period to which the adjustment relates (when the taxpayer grants a price discount or reduction on all supplies of goods or services made or provided to one recipient in a given period).

Invoices of the taxpayer exempt from VAT

The invoice may now also be issued by a taxpayer who benefits from VAT exemption (regardless of whether he has registered for VAT-R or not). Importantly, the same rules apply to the documents issued by him as apply to regular invoices. The difference is the scope of data that should be included on them.

Taxpayers who are subject and objectively exempt from VAT should indicate on the invoice issued:

provision of the act or act issued on the basis of the act, on the basis of which they apply the tax exemption,
a provision of Directive 2006/112 / EC which exempts a given supply of goods or services from tax, or
any other legal basis which indicates that the supply of goods or services is exempt.

Importantly, non-VAT invoices in accordance with Art. 106e paragraph. 4 point 3 do not contain information about:

tax rate,
the sum of the net sales value, broken down into sales subject to individual tax rates and sales exempt from tax,
the tax amount on the sum of the net sales value, broken down into amounts related to individual tax rates.

The provisions of the act regarding invoices issued by taxpayers exempt from VAT are specified in the Regulation of the Minister of Finance of December 3, 2013 on issuing invoices, stating that a non-VAT invoice should contain:

date of issue,
next number,
names and surnames or names of the taxpayer and buyer of goods or services and their addresses,
name (type) of goods or services,
measure and quantity (number) of delivered goods or scope of services rendered,
unit price of a good or service,
the total amount due,
indication of the provision of the act, the act issued on the basis of the act, the provision of Directive 2006/112 / EC of the Council of 28 November 2006 on the common system of value added tax (Journal of Laws UE L 347 of 11.12.2006, p. 1, as amended) or any other legal basis according to which the taxpayer applies the tax exemption (this point does not apply to taxpayers exempt from tax).