Term
VAT records
The records a VAT payer must keep alongside its accounts: invoices received and issued, the taxable amount, the VAT and the deducted VAT by rate and period. The VAT return and control statement are compiled from them, and the tax office may request them.
Updated
What it means
VAT records are the records a VAT payer must keep under the VAT Act. They contain data on goods and services supplied and received, taxable amounts and VAT by rate, exempt supplies, the VAT deducted and adjustments and corrections to deductions. They must be kept by tax period.
In double-entry bookkeeping the records are usually kept directly in the accounting software: each invoice, when posted, is assigned to a line of the VAT return and control statement. With single-entry bookkeeping or sole traders, they often take the form of an invoice book supplemented with VAT records.
The law also requires special records for some regimes, for example goods sent to another state under call-off stock, the special scheme for travel agents or the adjustment of VAT deducted on capital goods over five or twenty years.
How it works in practice
From the records we prepare the monthly or quarterly VAT return and control statement, and where needed the EC sales list. Because the control statement contains invoice-level data, the records must be complete and accurate down to details such as the customer’s VAT ID or the date of supply.
We regularly reconcile the records with the books: the VAT balance on account 343 must agree with the return. Differences are most often caused by invoices posted in a different period from the one in which the deduction was claimed, or corrections reflected in only one of the two.
The records and supporting documents must be kept for ten years from the end of the year they relate to. For electronic archiving, authenticity of origin, integrity of content and legibility must be ensured, and the company must make them available to the tax administrator on request.
What to watch out for
The most common mistake is records that differ from the control statement, for example when an invoice is claimed in the return but missing from the statement or shown with a different base. The Financial Administration analyses such differences automatically and sends requests for explanation.
Watch non-payers who pay VAT on services bought from abroad or on intra-EU acquisitions of goods. They too must keep records of these transactions and file returns, even though they are not full VAT payers.
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