Document verification before recording a VAT transaction: the sequence set out in the European directive

01

What it means to verify a document before recording it

The VAT directive requires that every invoice, paper or electronic, maintain the authenticity of origin, the integrity of content, and legibility from the moment of issue until the end of the storage period. Verifying a document before recording means checking these three conditions and linking them to a reliable audit trail back to the underlying transaction.

02

Why the directive requires this

Every taxable person must keep accounts detailed enough to allow VAT to be applied and checked by the tax administration. This obligation makes a verification step necessary before a document enters the records, because an upstream error carries through into the periodic return.

03

The verification sequence

Steps

1. Verify authenticity of origin: confirm the identity of the supplier or issuer of the invoice.
2. Verify integrity of content: confirm that the required information has not been altered.
3. Verify legibility and reconstruct the audit trail between the invoice and the corresponding supply of goods or services.
4. Link the document to the detailed accounts required for the application and control of VAT.
5. Prepare storage of the copy in the established location, ready for any request from the competent authority.

04

A hypothetical case

Hypothetical example: a company receives an electronic invoice transmitted via electronic data interchange (EDI). Before recording it, the accounting manager verifies that the transmission agreement provides for procedures guaranteeing authenticity of origin and integrity of data, then stores the copy according to the conditions set by the Member State of establishment.

05

Checklist before recording

• Identity of the issuer verified and documented.
• Content of the invoice confirmed as unaltered.
• Audit trail between invoice and transaction reconstructible.
• Copy stored in the established location and accessible without delay to authorities.
• Data ready to be included in the VAT return within the deadline set by the Member State.

06

How software can support this verification

A company can ask its software partner to set up a flow that records, for each pending document, who verified the issuer's identity, who confirmed the integrity of the content, and where the stored copy is kept. This is a suggested operational choice, not an obligation arising from the software itself: responsibility for verification remains with the identified business roles, with traceability of approvals before the document moves to recording.

07

Frequently asked questions about the verification sequence

Verification applies to both paper and electronic invoices, because the directive requires authenticity, integrity, and legibility for both forms.

The detailed accounts linked to the invoice are needed to make the tax applicable and checkable by the tax administration.

The stored copy must remain available without delay to the competent authorities, at the location the taxable person establishes.

08

Points to remember

• Authenticity, integrity, and legibility must be checked from issue through the entire storage period.
• The audit trail always links the invoice to the actual transaction.
• Storage must remain accessible without delay to the competent authorities.

09

Next step

Map the roles involved in your company's document verification and ask your software partner how to make every step traceable before recording.