EU Invoice Requirements

Overview

Under EU VAT rules, businesses must issue invoices for most business-to-business (B2B) transactions and certain business-to-consumer (B2C) sales. These requirements ensure proper VAT accounting, compliance, and recovery of VAT paid on purchases.

When an Invoice is Required

• B2B Transactions: Mandatory for most supplies to VAT-registered businesses or non-taxable legal entities (e.g., local authorities). Exceptions include exempt financial/insurance services supplied in another EU country.
• B2C Transactions: Required for sales to private individuals in cross-border situations (e.g., distance selling when taxable in another EU Member State without using the One Stop Shop).
• National Variations: Some countries require invoices for additional transactions or have specific exemptions.

Required Information on Invoices

Full VAT Invoice

Must include:

• Date of issue
• Unique sequential number
• Supplier’s and customer’s full names/addresses
• Supplier’s VAT number (mandatory); customer’s VAT number (for intracommunity supplies)
• Description, quantity, and unit price of goods/services (excluding VAT)
• VAT rate(s) and amount payable
• Total amount payable (inclusive/exclusive of VAT)
• Additional notes for exemptions, reverse charge, or special schemes

Simplified VAT Invoice

Permitted for transactions under €100 (varies by country). Requires:

• Date of issue
• Supplier’s name/address and VAT number
• Description of goods/services
• VAT amount or calculation details
• Total amount payable

Special Invoice Types

• Self-billing: Must state "Self-billing" and include all full invoice details.
• Reverse Charge: Requires "Reverse charge" notation and full details.
• Margin Scheme: Must reference the applicable scheme (e.g., "Margin Scheme – Second-Hand Goods").

Electronic Invoicing Requirements

• Current Rules: Electronic invoices are equivalent to paper invoices but require recipient acceptance. Must ensure authenticity, integrity, and legibility.
• Upcoming Changes:
  • 2028: Mandatory e-invoicing for all EU businesses (structured formats like XML, UBL, or PDF/A3).
  • July 1, 2030: Full B2B e-invoicing mandate under the VAT in the Digital Age Directive. Customer consent no longer required.
• Country-Specific Mandates:
  • Germany: Phased implementation starting January 2025 (voluntary) and January 2026 (mandatory).
  • Italy: Mandatory since 2019 via the SdI system.
  • Poland: Mandatory B2B e-invoicing via KSeF portal from January 2025.
  • France: Phased rollout starting January 2025 for medium-sized companies.

Record-Keeping Obligations

Businesses must retain invoices and related records for 6–10 years (varies by country) for tax authority inspections.

Key Takeaways

1. Mandatory Scenarios: Invoices are required for most B2B transactions and specific B2C cross-border sales.
2. Content Variations: Full invoices require detailed information, while simplified versions are permitted for low-value transactions.
3. E-Invoicing Transition: Prepare for mandatory structured e-invoicing by 2028–2030, with phased implementation in countries like Germany and Italy.
4. Country Compliance: Review national requirements for additional details or deadlines.