What data is needed to make a VAT process controllable

01

The short answer

To make a VAT process controllable you need data that allows every transaction to be reconstructed: the supplier's VAT identification number, and the buyer's VAT identification number when the buyer is liable for the tax or in the case of an intra-EU supply under Article 138, full name and address, quantity and nature of goods or services, date of the transaction, taxable amount per rate, rate applied, and the amount of tax due (citation-2). To this must be added the data needed for the periodic return, namely the total amount of taxable transactions, deductions, and exempt transactions (citation-1).

02

Where this requirement comes from

Directive 2006/112/EC requires every taxable person to keep accounts detailed enough to allow VAT to be applied and checked by the tax authority (citation-3). This means linking every invoice issued or received to an identifiable transaction, through management controls that create a reliable audit trail between the invoice and the supply of goods or services (citation-4).

03

How to organize the data flow

Steps

1. Collect for each invoice the data from Article 226: VAT identifiers, names, addresses, quantity, nature, date, taxable amount, rate, tax (citation-2).
2. Verify that the VAT amount is expressed in the national currency of the Member State, even if other amounts are in a different currency (citation-4).
3. Ensure authenticity of origin, integrity of content, and legibility of the invoice from issuance until the end of the storage period (citation-4).
4. Store copies of issued and received invoices in a place accessible without delay to the competent authorities (citation-3).
5. Aggregate the data for the periodic return: chargeable tax, deductions, exempt transactions, within the deadline set by the Member State (citation-1).

04

A hypothetical example

Hypothetical example: a company selling services to a customer in another Member State records the recipient's VAT number, the date of the service, and the taxable amount per rate (citation-2). If the tax period set by its Member State is one month, the company prepares the return with the total amount of taxable transactions and deductions, within the set deadline, which does not exceed two months after the end of the period (citation-1).

05

Minimum checks to perform on each invoice

• Supplier VAT number always, and the buyer's VAT number when the buyer is liable for the tax or in the case of an intra-EU supply (Article 138); full name and address (citation-2).
• Date of the transaction or advance payment, if different from the invoice issue date (citation-2).
• Taxable amount per rate, rate applied, amount of VAT payable (citation-2).
• Special notations when applicable: cash accounting, self-billing, reverse charge, exemption with regulatory reference (citation-2).
• Stored copies of issued and received invoices, accessible without delay to the authorities (citation-3).

06

Setting up the process with software

A company can choose to configure, together with its software partner, a flow that links every invoice to the data required by Article 226 - VAT identifiers, dates, taxable amounts, and rates - so as to have a consistent trail between accounting entries and the document (citation-2). It can also define roles and permissions for those who store invoice copies and those who prepare the periodic return, maintaining an audit trail between the invoice and the underlying transaction (citation-4).

As an operational choice, it is useful to establish a single, traceable storage location that allows invoices and information to be made available to the competent authorities without delay, and to aggregate the data needed for the VAT return within the deadline set by the Member State (citation-3, citation-1).

07

Frequently asked questions about required data

• The minimum data for each invoice includes VAT identifiers, names and addresses, quantity and nature of goods or services, date, taxable amount per rate, and the VAT amount (citation-2).
• For the periodic return, the total amount of taxable transactions, deductions, and exempt transactions is needed (citation-1).
• Storage requires making invoices available without delay to the competent authorities, at the location chosen by the taxable person (citation-3).

08

Useful next step

The useful next step is to map the mandatory invoice fields and the periodic return data in your own system, verifying that each invoice is linked to an identifiable transaction through a reliable audit trail (citation-4, citation-2).