Get a proper invoice and avoid further problems

 

In previous articles we have discussed about the requirements for invoices to be considered acceptable by the tax authorities. While it is normal for most companies to produce the invoices properly, many elude a prerequisite, the description of the billed transactions. If this happens may occur that the tax authorities rejects you to deduct the paid VAT if the description is generic, inaccurate or incomplete, so do not hesitate when it comes to claiming your provider everything you need to be sure you get a correct invoice.
You should know that for the description of an invoice to be correct it is necessary that through it you can see exactly what is being sold, and thus, in case of a possible tax inspection the Tax Authorities should be able to verify that both the tax base as the VAT rate applied are correct. In order to avoid any problem we recommend:
1. When you make purchases of goods you must check the description of the items appear correctly detailed in the bill and would be also convenient the invoice includes the reference number of the delivery note, in which case you should keep both documents together.

 

2. In case you are hiring services the invoice should include the most accurate description possible of the services.

 

 But beware; if you have not done such precautions, all is not yet lost. In court you can get to defend the view that, having not yet met the formal requirements, you may deduct the VAT. And we say this because there are judicial pronouncements in which was incorporated the deductibility of the VAT invoices that do not fully meet these formal requirements. The most commonly arguments used in these cases, and maybe they can help, have been:

 

1.The not acceptance of the tax deduction goes against the principle of neutrality which the VAT cannot be a greater cost to the company.

 

2. If the nature of the transaction can be justified by other documents then the formal non-compliance could not be enough.

3. Not to accept the company to deduct the VAT implies double taxation because the tax here would be supported by the company and by the final consumer.

 

Despite all this, our professional advice is to check the invoices as soon as you get them and in case they are not correct please require the suppliers their amendment because remember that a properly produced bill can save you a lot of headaches.

For further details do not hesitate in contact VP Advisers