Tax document

What it means

Tax document is the everyday name for a document that gives rise to a right to deduct VAT. The VAT Act itself does not use the phrase: it speaks of an invoice and lists what one has to contain.

Several kinds of document fall under the same label: a full invoice, a simplified invoice including an eKasa till receipt, a corrective document and a proof of payment. They differ in the data they carry, not in legal force.

A proforma invoice, an order or a payment request is not a tax document. Until the tax point arises there is nothing to deduct, so VAT shown on a proforma is not deducted; only the invoice the supplier issues for the payment received or for the supply opens the right to deduct.

How it works in practice

For the bookkeeper it is also an accounting document, so it has to stand up twice: once for accounting, once for tax. A missing customer VAT number is not a formality but a condition of input VAT deduction.

The supplier issues the document within the period the VAT Act sets, and its data must match what both sides report in the control statement. That is why a document number is never rewritten into a format of your own.

We keep the client’s documents in the form they arrived in: an electronic invoice as the original file, a paper one on paper or as a reliable digitised copy. Retention of tax documents is governed by the VAT Act, and its periods can be longer than ordinary bookkeeping practice assumes.

What to watch out for

A simplified invoice may be used only up to the value threshold the Act sets. Above it a full invoice identifying the customer is needed: an eKasa receipt for an expensive purchase will not support the deduction, and an audit collects the tax back with interest.

A document made out to the director as a private person, or with wrong customer details, can be challenged in an audit. The fix is a corrective invoice from the supplier, not retyping the data in the books, and until the corrected document arrives the deduction stands on weak ground.