Rectifying invoices: Don't pay the VAT that doesn't apply to you
Posted: Tue Dec 17, 2024 6:47 am
What corrective invoices are, how to issue them and in which cases they should be issued are some of the most frequently asked questions among accountants.
We explain what a corrective invoice is, the types that exist and how to correct errors in your billing using a corrective invoice.
Learn how to recover VAT charged on invoices issued that will not be collected.
Although billing is one of the most important processes in a business, errors are relatively common during this process.
If we make a mistake when issuing cabo verde email list an invoice or we fail to collect payment, we can correct the error or recover the VAT by issuing a corrective invoice.
It is important to note that the billing regulations establish that issued invoices cannot be modified or deleted.
The importance of corrective invoices with the entry into force of the Anti-Fraud Law
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What is a corrective invoice?
A corrective invoice is a document that allows you to modify and/or expand an existing invoice, without having to make changes to an invoice already issued.
Since issued invoices cannot be modified or deleted, the Tax Agency offers companies and self-employed workers the possibility of issuing a new invoice to replace the previous one or a corrective invoice for differences .
A corrective invoice for replacement must always refer to the original invoice already issued .
The entry into force of the Verifactu Regulation will require that billing and accounting software not allow invoices to be cancelled or modified .
Types of corrective invoices
The issuance of a corrective invoice may be done by substitution or by differences .
Replacement: 2 invoices must be recorded, the incorrect one with negative amounts and the corrective one. In addition, the correction made must be reported, also indicating the amount of said correction.
Differences: 1 invoice must be recorded in which the corrected amount is directly reported, regardless of its sign.
For example, in an invoice with a taxable base of €1,000 and a VAT rate of €210, an error is detected and must be rectified , so that the correct data must be €900 for the taxable base and €189 for VAT . Therefore, the following is done:
Replacement : an invoice will be issued with a taxable base of €1,000 and a rate of €210 and another corrective invoice with a taxable base of €900 and a VAT rate of €189.
Due to differences : an invoice is issued with a taxable base of -€100 and a VAT rate of -€21.
When to issue a corrective invoice?
A corrective invoice must be issued in cases where the original invoice does not meet any of the requirements established as mandatory in articles 6 or 7 of the Regulation governing billing obligations, approved by Royal Decree 1619/2012 , of November 30.
Among the cases in which we must issue a corrective invoice we can highlight the following:
Errors or lack of mandatory data that should be included in the corrected invoice . The most common errors are:
In the issuer's data.
In the VAT charged on the invoice, when the charged amounts have been determined incorrectly, due to the application of an inappropriate tax rate.
When any of the circumstances that give rise to a change in the tax base occur.
Due to the improper application of withholdings to personal income tax accounts.
We explain what a corrective invoice is, the types that exist and how to correct errors in your billing using a corrective invoice.
Learn how to recover VAT charged on invoices issued that will not be collected.
Although billing is one of the most important processes in a business, errors are relatively common during this process.
If we make a mistake when issuing cabo verde email list an invoice or we fail to collect payment, we can correct the error or recover the VAT by issuing a corrective invoice.
It is important to note that the billing regulations establish that issued invoices cannot be modified or deleted.
The importance of corrective invoices with the entry into force of the Anti-Fraud Law
Become an accounting expert
Want to know more? Download your Basic Kit now to keep your accounting up to date!
I want to download my guide!
More than 2,000 users have downloaded this guide
Sage
What is a corrective invoice?
A corrective invoice is a document that allows you to modify and/or expand an existing invoice, without having to make changes to an invoice already issued.
Since issued invoices cannot be modified or deleted, the Tax Agency offers companies and self-employed workers the possibility of issuing a new invoice to replace the previous one or a corrective invoice for differences .
A corrective invoice for replacement must always refer to the original invoice already issued .
The entry into force of the Verifactu Regulation will require that billing and accounting software not allow invoices to be cancelled or modified .
Types of corrective invoices
The issuance of a corrective invoice may be done by substitution or by differences .
Replacement: 2 invoices must be recorded, the incorrect one with negative amounts and the corrective one. In addition, the correction made must be reported, also indicating the amount of said correction.
Differences: 1 invoice must be recorded in which the corrected amount is directly reported, regardless of its sign.
For example, in an invoice with a taxable base of €1,000 and a VAT rate of €210, an error is detected and must be rectified , so that the correct data must be €900 for the taxable base and €189 for VAT . Therefore, the following is done:
Replacement : an invoice will be issued with a taxable base of €1,000 and a rate of €210 and another corrective invoice with a taxable base of €900 and a VAT rate of €189.
Due to differences : an invoice is issued with a taxable base of -€100 and a VAT rate of -€21.
When to issue a corrective invoice?
A corrective invoice must be issued in cases where the original invoice does not meet any of the requirements established as mandatory in articles 6 or 7 of the Regulation governing billing obligations, approved by Royal Decree 1619/2012 , of November 30.
Among the cases in which we must issue a corrective invoice we can highlight the following:
Errors or lack of mandatory data that should be included in the corrected invoice . The most common errors are:
In the issuer's data.
In the VAT charged on the invoice, when the charged amounts have been determined incorrectly, due to the application of an inappropriate tax rate.
When any of the circumstances that give rise to a change in the tax base occur.
Due to the improper application of withholdings to personal income tax accounts.