How to organize a documentary check before recording a VAT transaction

01

The short answer

Before recording a transaction, a business must be able to show that the related invoice is authentic in origin, has intact content and is legible, from the moment of issue until the end of the storage period (citation-4). The directive also requires accounting records detailed enough to allow VAT to be applied and checked by the tax authority (citation-3). An organized documentary check links each invoice to the corresponding supply of goods or services, through business controls that create a reliable audit trail (citation-4).

02

What the legal framework requires

The taxable person decides independently how to ensure authenticity of origin, integrity of content and legibility of the invoice, including through business controls (citation-4). Anyone storing invoices electronically may need to ensure, by the same means, the authenticity and integrity of the stored data, as determined by the Member State (citation-1).

The VAT return must contain all the data needed to determine the tax due, the deductions, and the amount of taxable and exempt transactions (citation-1); a prior documentary check makes it easier to gather this data within the deadline set by the Member State for each tax period (citation-1).

03

Steps of the check

Steps

1. Verify that the invoice clearly shows the identity of the supplier or service provider, meeting the requirement of authenticity of origin (citation-4).
2. Check that the content required by the directive has not been altered relative to the underlying transaction (citation-4).
3. Link the invoice to the supply of goods or services through a reliable audit trail (citation-4).
4. Make sure the data feeds into accounting records detailed enough for tax control (citation-3).
5. Keep a copy of the invoice issued or received, in line with the storage obligation (citation-3).

04

A hypothetical case

Hypothetical example: a business receives an electronic invoice sent via EDI. Before recording it, it checks that the transmission agreement includes procedures ensuring authenticity of origin and integrity of data, one of the technologies indicated by the directive (citation-2). If the invoice is part of a batch sent to the same recipient, the business also checks that the common information is accessible for each invoice in the batch, as allowed by the directive (citation-3).

05

Checklist before recording

• Identity of the supplier or service provider confirmed (authenticity of origin) (citation-4).
• Invoice content unchanged relative to the transaction (integrity of content) (citation-4).
• Invoice legible from issue until the end of storage (citation-4).
• Stored copy of the invoice issued or received (citation-3).
• Data ready for the VAT return within the deadline set by the Member State (citation-1).

06

Setting up the check with accounting software

A business can choose to configure, together with its software provider, a workflow that records for each invoice the identity of the supplier, a unique reference to the linked supply, and the date of the check, making traceable the link required by the directive (citation-4). It can also assign a review role separate from the person recording the transaction, keeping control and posting distinct, and maintain a log of checks to support the detailed accounting required (citation-3). These are suggested operational choices, not legal software requirements.

07

Useful clarifications

• The audit trail links the invoice to the underlying transaction, but does not replace the detailed accounting separately required for tax control (citation-4, citation-3).
• The storage location is chosen by the taxable person, provided the stored invoices or information are made available without delay to the competent authorities (citation-3).

08

Next step

A business can start by mapping the requirements of authenticity, integrity and legibility onto the invoices already in use, defining who checks and who records, and then extending the documentary check process to new e-invoicing flows (citation-4, citation-3).