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Is an invoice compulsory?

02.10.2023
Is an invoice compulsory?

In the complex world of corporate finance, tax and administration, invoicing is an important issue for every business. But when is an invoice actually compulsory in the Netherlands? This article explores these and related questions in order to provide a comprehensive overview of the legislation governing invoicing.

What is an invoice?

An invoice is a document detailing a transaction between two parties. It is essentially a request for payment and written evidence of a service rendered or a product supplied. Invoices are very important for both the supplier and the customer as they record what has been provided, including specifications such as price, quantity and duration.

Is an invoice compulsory?

A key question that many people face is whether sending invoices is mandatory. In the Netherlands, invoicing is indeed compulsory for businesses that supply goods or services to other businesses. You are obliged to issue an invoice even if you supply goods to the government. For transactions with individuals, invoicing is only compulsory in certain sectors, such as the automotive industry or distance selling.

What must be on the invoice?

The compulsory elements of an invoice are defined by law. The invoice must contain the following information:

  • the name and address of the supplier,
  • the name and address of the customer,
  • the date of issue,
  • The VAT identification number of the supplier,
  • Supplier’s Chamber of Commerce number,
  • unique invoice number,
  • type of goods or services
  • price and quantity of the goods or services
  • the applicable VAT rate and the VAT payable.

Is it necessary to indicate the VAT number on the invoice?

Yes, the invoice must include the VAT identification number of the supplier and the customer. This is a legal requirement for all businesses subject to VAT. Failure to quote the VAT number may result in a fine and the inability to deduct the VAT charged.

Both the supplier’s VAT identification number and the customer’s VAT identification number (if applicable) must be provided. The VAT identification number is essential for tax accounting and failure to provide it can have serious consequences, such as the inability to recover the tax charged and possible penalties.

Is it compulsory to include the Chamber of Commerce number on the invoice?

Yes, it is a legal requirement to include the Chamber of Commerce number on the invoice. The Chamber of Commerce number is necessary to identify the company and helps to prevent fraud. As with the VAT number, failure to quote the Chamber of Commerce number may result in a fine.

What is the difference between a VAT number and a Chamber of Commerce number?

When you register your company, you automatically receive a VAT number. Unlike the Chamber of Commerce number, the VAT number consists of 14 characters (the Chamber of Commerce number consists of 8 characters). You must use both numbers on your invoices. In this case, the Chamber of Commerce number should even be given in several places.

The VAT number can be found in the tax authorities’ letters. If you want to know the VAT number of another company, you can usually find it on the company’s website or ask the company’s representative.

The role of digital invoices

Digital invoicing is increasingly the norm in modern business. A digital invoice is just as legally valid as a paper copy if it meets the legal requirements described above. An additional advantage of digital invoices is that they are easier to archive and reproduce.

What is the deadline for sending a company invoice?

In the Netherlands, there is no legal time limit for sending an invoice after the delivery of a service or product. However, there are general guidelines and good practices that are generally followed. As a general rule, the invoice is sent as soon as possible after delivery of the service or product, often within 14-30 days. However, this can vary depending on the sector, the nature of the transaction and the agreements between the parties.

Contractual arrangements

The deadline for sending the invoice may be specified in the contract between the supplier and the customer. It is therefore advisable to have clear agreements in place and to put them in writing, for example in a contract or in the terms and conditions.

Differences between sectors

Some sectors have specific rules or customs on when invoices should be sent. For example, in the construction sector, it is common for invoices to be sent at a fixed time depending on the progress of the project.

Consequences of late invoicing

Although there is no strict legal deadline within which an invoice must be sent, sending an invoice late can have a negative impact on a company’s cash flow. It can also complicate the business relationship with the customer.

VAT return and invoicing

It is important to note that the time limit for including a transaction in the VAT return has legal provisions. As a general rule, this must be done within the accounting period in which the goods or services were supplied. It is therefore advisable to prepare and send invoices in accordance with the VAT reporting deadlines.

How do I work with foreign customers?

Different rules apply when dealing with foreign customers. When goods are supplied within the Community, both parties must have a valid VAT identification number, which must also appear on the invoice. In addition, the invoice must also comply with the invoicing requirements of the relevant EU country.

We hope that this comprehensive overview of the Dutch invoicing rules has answered some of your questions. The requirements are strict and non-compliance can lead to serious penalties. It is therefore important for you, as a business owner, to be well aware of what is expected of you in the area of invoicing. A streamlined invoicing process is not only beneficial for the efficient management of your business, but it is also a legal requirement that must be taken seriously.

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