What business data is needed to make a VAT process controllable

01

The data that makes a VAT process controllable

A VAT process is controllable when the data collected allows determination of the tax due and deductions, as required for the VAT return, when invoices contain the mandatory indications of Article 226, and when the business keeps accounting detailed enough to allow control by the tax administration.

02

Why this data is required

The VAT return must include all data necessary to determine the tax due and the deductions to be made, including the total amount of transactions relating to that tax and those deductions, as well as the amount of exempt transactions. Member States set the filing deadline, which cannot exceed the end of the tax period by more than two months, usually between one and three months, unless a different duration not exceeding one year is set.

03

Data collection workflow per invoice

Steps

1. Record the mandatory indications of Article 226: identity of the parties, nature of the goods or services, taxable amount.
2. Note the date of supply or performance, or of the advance payment, if different from the invoice issue date.
3. Calculate the taxable amount per rate, the rate applied, and the VAT amount due.
4. Apply special wording required, such as cash accounting, self-billing, or reverse charge.
5. Keep accounting detailed enough to allow VAT application and control by the tax administration.

04

A hypothetical case

Hypothesis: a business issues an invoice to a VAT-identified buyer who is liable for the tax. The administrative workflow should include the wording 'reverse charge', the buyer's VAT identification number, the nature of the goods supplied, and the VAT amount payable expressed, if the invoice is in a foreign currency, also in the national currency of the Member State.

05

Minimum checks before recording

• VAT number, name, and full address of the taxable person and the buyer are present.
• Quantity and nature of the goods or services are described in a verifiable way.
• Taxable amount per rate, the rate, and the VAT amount are correctly calculated.
• Special wording (self-billing, reverse charge, cash accounting) is applied when required.
• Copies of issued and received invoices are archived and accessible without delay to authorities.

06

How to set up control with a software partner

A business can set up, together with its software partner, a workflow where every recorded invoice gathers the Article 226 indications and stays linked to management controls that create a reliable audit trail between the invoice and the transaction.

It is a useful operational choice to assign distinct roles for issuing, verifying, and archiving, with a periodic review comparing accounting data with what is required for the VAT return.

07

Frequently asked clarifications about required data

• The authenticity of origin, integrity of content, and readability of the invoice must be ensured from issuance until the end of the archiving period.
• The taxable person may choose the place of archiving, provided the invoices are made available without delay to competent authorities.
• The use of electronic invoicing generally requires the recipient's agreement, unless specific national provisions apply.

08

Practical next step

Compare the current invoicing workflow with the checklist above and verify that every invoice retains the Article 226 indications and an audit trail from issuance to archiving, in coordination with the VAT return filing deadline set by your Member State.