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Simplified VAT invoice in Lithuania

02.11.2023
Simplified VAT invoice in Lithuania

The simplified VAT invoice is an important business document that can help to understand and evaluate payments for goods or services between two parties. It simplifies accounting and provides tax transparency. But how does this document differ from a standard VAT invoice? And in which cases should it be used? Let’s start by explaining.

What is a simplified VAT invoice?

A simplified VAT invoice is a document that records a transaction between a seller and a buyer, but is simpler than a standard VAT invoice. It is often used for smaller transactions or where the seller does not have all the necessary information about the buyer.

Unlike a standard VAT invoice, a simplified VAT invoice does not always have to show all the information, such as the VAT code of the buyer or a detailed description of the goods/services. However, it is important to note that certain details must still be provided for the document to be considered legally valid.

Why should I choose a simplified VAT invoice?

The simplified VAT invoice has several advantages:

  • Simplicity: It is easier to fill in and understand, reducing the likelihood of errors.
  • Speed: Because it does not include as many details as a standard VAT invoice, it can be prepared and sent faster.
  • Flexibility: It allows the seller to react quickly to situations where not all the necessary information is available.

Which transactions can be recorded on a simplified VAT invoice?

Although the simplified VAT invoice is flexible, there are certain criteria that a transaction must meet:

  • Lower value: There is often a limit to the amount that can be recorded on this document. Depending on the country, this amount may vary.
  • Lack of data: When the seller does not have all the necessary information about the buyer, such transactions can be recorded on a simplified VAT invoice.
  • Short-term transactions: Some countries have restrictions on how long a transaction can last before it can be recorded in this document.

What are the risks of a simplified VAT invoice?

Although this invoice has many advantages, there are also some risks:

  • Incorrect information: As this invoice does not always require detailed information, problems may arise due to incorrect information.
  • Tax problems: In some countries, there may be tax problems if the simplified VAT invoice is not filled in correctly or if it is used for incorrect transactions.

How can I ensure that the simplified VAT invoice is correct?

To ensure that this invoice is correct, you should:

  • Learn the rules: Before using this document, it is important to learn all the requirements and rules that apply in your country.
  • Consult experts: If you are not sure how to fill in this invoice correctly, consult accountants or other experts.

Can all businesses use the simplified VAT invoice?

Not all businesses can use the simplified VAT invoice. It often depends on the country’s tax regulations and the specific business area in which the organisation operates. For example, in some countries only certain business sectors or companies with an annual turnover below a certain amount can use this document. This helps countries to ensure that simplified VAT invoices are not used for abuse or fraud. Before you start using this invoice, it is essential to find out whether your business meets all the requirements.

The future of the simplified VAT invoice

The world and business are constantly changing, and so the requirements for the documents we use in our day-to-day business may also change. Technological advances, digital transformation and globalisation can all have an impact on how businesses manage their finances and tax. The simplified VAT invoice can be improved to meet these changes. For example, new digital features may be introduced in the future to automate and simplify the creation and management of this invoice. So, while today this document looks a certain way, in the future it may become even more user-friendly and flexible for businesses.

While a simplified VAT invoice can be useful, it is important to use it responsibly and make sure that all the details are correct. It should also always be borne in mind that this document is not always a substitute for a standard VAT invoice, so it is important to know when to use it and when not to.