What is a VAT Invoice?
A VAT invoice is a specific type of invoice required in countries with a Value Added Tax (VAT) system. It includes additional mandatory fields beyond a standard invoice, allowing your business clients to reclaim the VAT they've paid on purchases. If you're VAT-registered and sell to VAT-registered businesses, you must issue a VAT invoice for every taxable supply.
Mandatory Fields on a VAT Invoice (EU Standard)
A full VAT invoice in the EU must include all of the following:
- •A sequential invoice number from a continuous series
- •The date of invoice
- •The date of the supply (if different from invoice date)
- •Your business name, address, and VAT registration number
- •Your customer's business name and address
- •Your customer's VAT number (for B2B transactions)
- •A description of the goods or services supplied
- •Quantity and unit price (net of VAT)
- •Total amount net of VAT
- •VAT rate applied (e.g., 20% or 23%)
- •Total VAT amount charged in the local currency
- •Total amount including VAT
Simplified VAT Invoices
The EU allows a simplified VAT invoice for supplies under certain thresholds (varies by member state, typically €150-€400). A simplified invoice doesn't need to include the customer's VAT number or a breakdown of net/VAT, but must still show the invoice number, date, your VAT number, description of supply, and VAT rate.
UK VAT Invoice Requirements Post-Brexit
UK VAT invoice requirements are similar to EU requirements. A full UK VAT invoice must include: your VAT registration number, supply date, invoice number, description of goods/services, amount net of VAT, VAT rate (currently standard 20%, reduced 5%, or zero 0%), VAT amount, and total including VAT.
When You Must Issue a VAT Invoice
If you are VAT-registered, you must issue a VAT-compliant invoice within 30 days of the supply date (EU standard) for all taxable B2B supplies. For B2C supplies (selling to individual consumers), a simplified invoice is usually sufficient. For intra-EU supplies (zero-rated), you still need a VAT invoice but show 0% VAT.
Reverse Charge VAT on Invoices
When selling services to VAT-registered businesses in other EU countries, the "reverse charge" mechanism applies. You issue the invoice with 0% VAT and include the note "VAT reverse charge" or the relevant regulatory reference. The customer accounts for the VAT in their own country. Make sure to include the customer's VAT number on these invoices.
How to Create a VAT-Compliant Invoice
Magic Invoice supports VAT calculation — add your VAT rate as a percentage on any invoice. The tool automatically calculates the net amount, VAT amount, and total. You'll need to add your VAT number and customer's VAT number in the appropriate fields. Export as PDF — the result is VAT-compliant for most standard B2B supplies.
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Create Free Invoice →Frequently Asked Questions
When do I need to charge VAT on an invoice?
You must charge VAT once you are VAT-registered in your country. Registration thresholds vary: £90,000 in the UK, €85,000 in France, €50,000 in Germany. Check your local threshold and register before exceeding it.
What happens if my VAT invoice is incorrect?
An incorrect VAT invoice can invalidate your customer's right to reclaim input VAT, leading to disputes and potential tax authority issues. Issue a credit note to cancel the incorrect invoice and reissue a corrected invoice with the next available number.
Does my VAT invoice need to be in a specific language?
Generally, VAT invoices must be in the official language of the country where the supply takes place. For cross-border EU supplies, the invoice can typically be in any language, but having a translation available is advisable.