A process that allows taxpayers to correct or update previously submitted VAT returns. It enables businesses to amend errors, omissions, or make changes in their original VAT returns within a specified time period set by the tax authority.
Council Directive 86/560/EEC - sets out the rules for VAT refunds to non-EU businesses that incur VAT on goods and services in an EU Member State where they are not established and do not make taxable supplies.
Council Directive 2008/9/EC - sets out rules for VAT refunds to EU-based businesses that incur VAT expenses in another EU Member State where they are not established and do not make taxable supplies.
The 6th Directive (Council Directive 77/388/EEC) was the foundational EU legislation that harmonised the Value Added Tax (VAT) system across all European Union Member States. It established the common framework for how VAT should be applied, calculated, and reported within the EU single market.
Invoices received by a business from its suppliers. Refers to the inbound invoice process.
Invoices issued by a business to its customers. Refers to the outbound invoice process.
The secure, long-term storage of digital invoices and related documents, often subject to legal retention requirements.
Transactions where both the buyer and the seller are businesses (e.g., supplier or retailer)
Transactions where a business and an individual consumer (e.g., retail sales)
Transactions where a business supplies goods or services to a government entity, other with specific e-invoicing requirements.
A claim does not meet the minimum monetary value threshold stipulated by the Tax Authority, to submit a foreign claim for refund. Claims that do not meet the stipulated threshold cannot be submitted
A model were e-invoices pass through a single, government-managed or authorised platform (e.g., Italy’s SDI system).
A digital “passport” to prove the e-invoice came from a trusted source
A real-time or near real-time government monitoring system where invoice data is submitted electronically to tax authorities as transactions occur.
The process of storing digital financial and transactional data in compliance with local laws (e.g., retention periods, security)
In the context of VAT, deadlines are set by tax authorities for actions such as filing returns, submitting refund claims, or making payments.
An e-invoicing model where data is exchanged directly between businesses or through certified providers, rather than via a central authority.
The standard VAT rate in the country.
A cryptographic method of ensuring the authenticity and integrity of a digital document, often required for e-invoices.
A tax paid directly to the government by an individual or organisation. It is based on income, profit, or property ownership and cannot be passed on to another party (for example: income tax, corporate tax, and property tax).
A Directive in the context of VAT refers to a legislative Act issued by the European Union (EU) that sets out objectives and principles all Member States must achieve, while allowing them flexibility in how to implement those rules into their national laws
A company that is physically established and registered for business within a specific country (i.e., an office, employees, or a fixed place of business)
Company is recognised as a legal entity for tax or compliance purposes, often includes a local business number (e.g. VAT registered, import/export registered etc.). For e-invoicing purposes – will refer to “VAT registration” as “registration” for simplicity.
Rules requiring the electronic submission of financial data to tax authorities, including e-invoicing and e-reporting obligations.
A unique identification number assigned to businesses and individuals involved in the import or export of goods within or outside the European Union (EU). It is used by customs authorities to track and record all cross-border trade activities.
Software used to manage and track employee expenses, often integrated with e-invoicing for T&E purposes
The European standard for sematic data model of the core elements of an electronic invoice, ensuring interoperability across the EU.
Is the core legal framework governing the VAT system within the European Union (EU). It consolidates and replaces earlier VAT legislation, including the 6th Directive (77/388/EEC), to create a harmonised set of VAT rules across all Member States. The current directive in force is Council Directive 2006/112/EC and is also known as the Principal VAT Directive
Exempt supplies refer to goods or services that are not subject to Value Added Tax under the applicable VAT legislation. This means no VAT is charged on the sale, and the supplier cannot recover any input VAT (VAT paid on related purchases or expenses) incurred in making those supplies.
Refers to additional tax recovery opportunities which VATIT have identified.
The regular interval at which a business must submit its VAT returns to the relevant tax authority. It determines how often VAT reporting and payments are due, based on the business’s turnover, transaction volume, or local tax regulations.
VAT incurred in a foreign country where the business in not registered. This can be recovered through the foreign refund mechanism.
A foreign VAT registration is required when a business is conducting taxable sales in a foreign country or has an establishment in that country, and it becomes mandatory for them to register for VAT in that country and file periodic VAT returns, to account for the Input VAT and Output VAT.
A conceptual model that supports interoperability of e-invoicing systems across different countries and platforms.
The General Data Protection Regulation (GDPR) is a comprehensive data protection law enacted by the European Union (EU) that governs how organisations collect, process, store, and share personal data of individuals within the EU and the European Economic Area (EEA). It aims to protect individuals’ privacy rights and imposes strict requirements on transparency, consent, data minimisation, and breach notification.
The total amount invoiced including VAT.
: A value-added tax levied on most goods and services, used in countries like Australia.
VAT charged on goods imported into a country from outside its customs territory. It is usually collected by customs authorities at the point of importation, based on the value of the goods, including transport, insurance, and any applicable customs duties.
A tax that is charged on goods and services rather than on income or profits. It is collected by a business at the point of sale and then remitted to the government (for example VAT).
Input VAT refers to the Value Added Tax (VAT) paid on business purchases and expenses. It is the VAT that a business incurs when buying goods or services used for its operations. This VAT can usually be reclaimed from the tax authority, subject to local VAT rules and regulations
The International Organisation for Standardisation (ISO) is an independent, non-governmental international organisation that develops and publishes globally recognised standards to ensure quality, safety, efficiency, and interoperability across industries and products. VAT IT adheres to ISO/IEC 27001:2022, which is the international standard for managing information security.
Refers to transactions between EU member states, which are subject to specific VAT rules and reporting (e.g., EC Sales List) (8th Directive)
Is a value-added tax -type levy applied to the sale of goods and services in Japan, as well as to imports. It is imposed on consumption and is collected at each stage of the supply chain, similar to VAT systems used in other countries.
Refers to the legal requirements for a business to register for VAT once its taxable turnover or business activities exceed a certain threshold or meet a specific criteria set by a country’s tax authority.
The total amount invoiced excluding VAT.
A process that does not allow changes or corrections after submission of a VAT return. Once a claim has been filed, no amendments can be made to add, remove, or adjust invoices or information. If an error or omission is discovered after submission under a non-amendment scheme, a new claim must usually be submitted in the next eligible period, or the missed VAT may be lost depending on the rules of the tax authority.
Is a value-added tax -type levy applied to the sale of goods and services in Japan, as well as to imports. It is imposed on consumption and is collected at each stage of the supply chain, similar to VAT systems used in other countries.
A government-authorised certification provider in Mexico that validates invoices under the national e-invoicing mandate.
A certified e-invoice service provider in France that helps route and validate invoices under the national e-invoicing mandate.
In the context of foreign VAT, reciprocity refers to the mutual agreement between countries that determines which nations are eligible to claim VAT refunds from one another. Under reciprocity rules, a country will grant VAT refunds to foreign businesses only if the applicant’s home country offers equivalent refund rights to businesses from the granting country.
A lower rate of VAT applied to specific goods or services that governments consider essential or socially important. It is set below the standard VAT rate and is intended to lessen the tax burden on consumers for everyday or priority items
The minimum level of taxable turnover a business must reach before it becomes legally required to register for Value Added Tax (VAT) or a similar indirect tax in a given country.
Standard Audit Tax File (XML file with summary information). An international standard for the electronic exchange of accounting data for tax audits, originally developed by the OECD.
A component of the Peppol network used to find the service metadata (capabilities and addresses) of an Access Point.
An exceptionally low rate of VAT, typically below 5%, which is applied to a limited range of essential goods and services. It is designed to make certain necessities more affordable for consumers by minimising the VAT burden.
Sometimes referred to as a Tax Certificate, Certificate of Status or Business License. A certificate that proves the claimant is registered for VAT/similar tax or carries out taxable activities in its country of residence.
A Tax Identification Number (TIN) is a unique number assigned by a country’s tax authority to individuals and businesses for the purpose of identifying them in all tax-related matters. It is used to track tax obligations, process returns, and facilitate communication between taxpayers and tax authorities.
A Tax Registration Number (TRN) is a unique identifier issued when a business or individual registers for a specific tax, most commonly Value Added Tax or Goods and Services Tax. It confirms that the entity is officially registered with the tax authority and authorised to charge, collect, and remit tax on taxable transactions.
Is any individual, business, or legal entity that independently carries out economic activities and is liable to charge, collect, and remit VAT under applicable tax laws
Refers to goods or services on which VAT is charged under a country’s VAT legislation. These supplies are made by a taxable person in the course of business and are subject to either the standard, reduced, or zero rate of VAT.
Refers to business-related expenses incurred by employees or company representatives while travelling for work purposes or entertaining clients, partners, or staff.
A tax deducted at the source by the payer of certain types of income such as interest, dividends, royalties, service fees, or rent before the payment is made to the recipient. The withheld amount is remitted directly to the local tax authority as an advance payment on behalf of the income recipient.
Refers to goods or services that are taxable but charged at a VAT rate of 0%. This means no VAT is added to the selling price, but the supplier can still reclaim the VAT paid on related business expenses (input VAT)
