Invoices play a key role in accounting and taxation. Firstly, they act as supporting documents for accounting entries, and secondly they are used to calculate the amount of VAT to deduct or pay.
A proper invoice is also essential for the recovery of debt because it proves the existence of a contract between the vendor or service provider and the buyer.
Invoices can be issued in paper or electronic format.
To be valid, they must be issued within precise deadlines and contain specific compulsory information for VAT purposes and to identify the issuing business.
Failing this, the issuer of the invoice cannot enforce the principle of the accepted invoice, even if the customer has not disputed the invoice in time.
The following are required to issue invoices:
- any person subject to value added tax;
- any person trading under his own name or any commercial company that sells goods or provides services to another registered VAT taxpayer.
For entirely private transactions that do not take place at regular intervals, it is not standard practice to issue an invoice.
As regards business relations with private end consumers, it is not mandatory to issue an invoice although it has become standard practice, mainly as proof of the transaction as the invoice is often the only written document proving the existence and terms of a contract.
Transactions between professionals
In transactions with a professional, the seller or service provider must issue the invoice:
- at the latest on the 15th day of the month:
- following the month where the delivery of goods or services took place;
- during which the delivery of goods or services took place in the event of periodic billing;
- or at the latest when a deposit is collected in the case of payment of a deposit.
However, a trader is free to issue an invoice as soon as possible.
Any document which alters the initial invoice in a specific and unequivocal manner is considered to be a new invoice.
On the other side, the debtor is bound by the contractual payment deadlines, or failing this, the legal payment deadlines.
In the event of late payments, the vendor/service provider is entitled to claim late-payment interest.
Transactions with a consumer
In the context of transactions with a consumer, the seller or service provider must undertake the following if he intends to apply late payment interest where necessary:
- issue the invoice within a month of receipt of the goods by the client, of completion of the works or provision of services;
- clearly state on the invoice that the legal rate of late-payment interest will be applied where necessary.
VAT data - Invoice > EUR 100
For VAT matters, invoices where the VAT-inclusive amount exceeds EUR 100 must contain the following information:
- date of invoice;
- a sequential number, based on one or more series, uniquely identifying the invoice;
- the VAT number of the vendor;
- where applicable, the VAT number of the customer;
- where applicable, the VAT number of the tax representative;
- full name and address of the VAT taxpayer and his customer;
- the quantity and nature of the goods delivered or the extent and nature of the services rendered;
- the date on which the delivery of goods or services took place or, if applicable, the date on which the deposit was paid if it is different from the invoice issue date;
- the tax base for each rate or exemption, the unit price before tax and any discounts, rebates or returns if these are not included in the unit price;
- the applied VAT rate;
- the amount of VAT to be paid.
In addition to the mandatory information, the invoice must contain, where appropriate, the following additional information:
- 'auto-liquidation' (reverse charge mechanism) where the buyer or client is liable for VAT;
- 'comptabilité de caisse' (cash basis accounting) where VAT becomes chargeable at the time of payment of the invoice;
- 'auto-facturation' (self-invoicing) when the client issues the invoice instead of the supplier or provider;
- "régime particulier - agences de voyage" with respect to the application of the special scheme for travel agencies (article 56bis of the law on VAT)
- 'régime particulier - ... (name of the scheme)' with respect to the application of the special scheme on profit margins (article 56ter of the law on VAT) concerning the supply by a taxable seller of:
- 'second-hand goods';
- 'art objects';
- 'collector's items or antiques';
- 'intra-Community delivery of a new means of transport'.
- first check the validity of the client's VAT number in the VIES VAT number validation database on the website of the European Commission;
- where possible, print and keep the results page with the client's VAT number and date of verification;
- and indicate the client's valid VAT number on the invoice.
VAT data - Invoice < EUR 100
In VAT matters, invoices where the VAT-inclusive amount does not exceed EUR 100 must only contain the following information:
- date of invoice;
- name and address of the supplier of the goods or services;
- quantity and nature of the goods and services delivered or the extent and nature of the services rendered;
- the invoice amount incl. VAT;
- the VAT rate.
Information concerning the business
All invoices must indicate:
- for companies:
- the company name and/or trading name;
- the legal form, reproduced legibly in letters and in full (before or after the trading name for an SA);
- address of the registered office (does not apply to cooperative companies);
- the wording 'Registre de commerce et des sociétés' ('Trade and Companies Register, Luxembourg') or the initials 'R.C.S. Luxembourg' followed by the registration number (does not apply to cooperative companies;
- the business permit number;
- for limited liability companies, indication of the company capital is also mandatory.
- for craftsmen and traders working in their own name: their profession and their business permit number.
Taxpayers are required to keep a duplicate of all invoices issued.
In order to avoid disputes concerning an invoice issued in due form to certain customers, it may be advisable to send them the invoice by registered mail.
In the framework of transactions between professionals and in the absence of contractual provisions on payment deadlines and late payment interest, it is recommended to indicate on each invoice that late payment interest at the legal rate will apply in the event of late payment.
In the context of transactions with a consumer, the invoice must expressly mention that the trader can claim legal late-payment interest.
The concept of the accepted invoice
Between traders, the existence of a contract can be proven by an accepted invoice, whether acceptance is express or implied.
An invoice is deemed to have been accepted in the event of unconditional payment or silence from the buyer's side which goes beyond the time frame required to check the invoice, its terms and the goods to which it relates.
Failing legal provisions in this matter, the courts generally deem that an invoice has been accepted after a period of 4 to 8 weeks.
Certain jurisdictions have even ruled that mail exchanges between traders that have not given rise to a written dispute are deemed to have been accepted as regards their content.
A buyer can rebut this presumption by proving that:
- he has disputed the invoice in due time or;
- his silence is not related to the acceptance of the invoice.
The concept of an accepted invoice only exists between traders and does not concern private end consumers.
Disputing an invoice
Invoices must be checked without delay, as well as any other commercial document received.
If an invoice or any other commercial document is not well-founded, the trader must dispute it, preferably in writing, failing which he may be bound by the concept of the accepted invoice (or mail).
Disputes must be formulated in a clear and precise fashion.
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