The invoice is the commercial document ‘par excellence’. It constitutes confirmation of the services rendered or goods delivered, for which payment must be made.
It is very important to ensure that invoices are raised correctly, in terms of both content and form, not just to avoid penalties but above all to guarantee good commercial relations with the customer, seeing as the latter runs the greatest risk of losing entitlement to deduct VAT in the event of an irregular invoice.
The main focus points are listed below.
By way of introduction we would point out that this explanation is not limited to invoices in the traditional sense of the word, but also applies to transfer documents, credit notes or other correcting/amending documents, for example.
An invoice is VAT-compliant when compulsory statements are included to qualify as a VAT-compliant invoice[1].
What these rules do not require is the mandatory mention of the word ‘invoice’ in order for the document to qualify as a VAT-compliant invoice.
In short, the invoice should in theory include at least the following data:
The inclusion of other specific data may be applicable, depending on certain situations:
Specifically for credit notes, an additional reference to the underlying invoice being adjusted and a reference to whether VAT has to be paid back to the Belgian Treasury (‘VAT to be paid back to the State to the extent that it was originally deducted’) must be included.
The VAT legislation does not contain any specific provisions on the language in which invoices have to be drawn up. However, the Belgian VAT Office may require a translation of invoices that have been drawn up in a language other than one of the national languages.
On the basis of language legislation certain provisions do apply in this respect, however, although they have admittedly been rendered more flexible under pressure from EU jurisprudence in order to avoid excessive hampering of the cross-border economy. In short, the Flemish Decree allows an ‘extra’ invoice to be drawn up in another language, but this document will only be regarded as ‘incidental’ and should be attached as an annex to the original invoice in Dutch.
It is important for these rules to be followed, seeing as an invoice in the wrong language is not legally valid and can in theory lead to nullity, resulting in the debtor being removed of his obligation to pay it.
The invoice should mention both the basis of assessment and the (total) VAT amount. In theory only the VAT amount payable needs to be expressed in the national currency of the competent Member State.
An invoice raised in Belgium must therefore state the VAT amount in Euros. The basis of assessment may in theory be expressed in a currency of one’s choice. However, when this is in a different currency, a conversion into Euros must be carried out for the reporting in the VAT accounting. The exchange rate to be applied is that agreed between the parties (stated in the contract or on the invoice) or in the absence thereof, the Euro’s most recent guideline rate published by the European Central Bank or by the National Bank of Belgium[2].
An invoice may be raised in paper format or electronically.
However, by analogy with a paper invoice, the authenticity of its provenance (meaning the guarantee of the identity of the party having delivered the goods or rendered the service or the party having issued the invoice), the integrity of its content and the invoice’s readability from the moment it is raised to the end of the period during which it is kept, must be guaranteed.
Specifically as far as electronic invoices are concerned, their use is only allowed subject to acceptance by the customer. This can be either explicit or tacit.
An electronic invoice is not bound by a particular format and may for example be a PDF file, an EDI file, an XML file or a QR code. In Belgium there is therefore freedom to choose a system to generate digital invoices. Of course there is nothing to prevent the taxpayer from making use of the advanced electronic signature system, a sealing algorithm or a system based on check sums, or working by means of corporate controls providing a reliable audit trail between the taxable transaction on the one hand and the electronic invoice on the other.
In some countries invoices have to be generated on the basis of government-approved systems. And in that way the term ‘real-time reporting’ comes into being, since the tax office then obtains a real-time view of invoices raised by businesses and companies.
In Belgium it won’t come to that just yet, but what is certain is that the electronic invoice will increasingly come to the fore, and that will obviously open the door to more (digital) real-time monitoring by the authorities.
[1]In line with Article 5, §1 of Royal Decree 1 of 29 December 1992.
[2] Article 27, §2 of the Value Added Tax Code (“WBTW”)
