Explanation regarding issuing VAT invoices for advanced payments and afterwards – for “final” VAT invoice

Below is an explanation regarding issuing VAT invoices for advance payments received and issuing “final” VAT invoice for the supply of goods/services.
1.     VAT invoice should be issued for advances payment received if such payment is subject to VAT.
2.     When a seller of goods/services finalizes the transaction, a “final” VAT invoice should be issued. The “final” invoice should indicate the difference between the amount of total value of transaction and the amount of advanced payment. VAT should be calculated on the amount of difference.

Until 1 October 2016, despite the fact, that VAT was applied to advanced payment and the invoice was issued, the “final” VAT invoice should have contained overall costs of goods/services and VAT amount.

Please find below the example, which illustrates changes in forming the advanced payment VAT invoices (total value of a transaction – EUR 8 000):

 

 

Advanced payment VAT invoice

„Final“ VAT invoice

 

 

Until

1 October 2016

 

The total value (including VAT)

EUR 3 000

EUR 8 000

Taxable amount

EUR 2 479

EUR 6 612

VAT (21%)

EUR 521

EUR 1 388

 

From

1 October 2016

The total value (including VAT)

EUR 3 000

EUR 5 000

Taxable amount

EUR 2 479

EUR 4 132

VAT (21%)

EUR 521

EUR 868

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