Presenting each invoice item in the VAT register - is it necessary?

Service-Tax

Taxpayers were concerned about the changes introduced from 2017 to Art. 109 paragraph. 3 of the Value Added Tax Act. This provision states that it is necessary to keep VAT records in such a way that they contain the data necessary for the correct preparation of the declaration. What data is obligatory after the changes in the act? Read the article and find out whether it is necessary to present each invoice item in the VAT register and how detailed the register must be!

Compulsory keeping of records for VAT purposes

The records to be kept by active VAT payers are the VAT register of purchase and the VAT sales register. This register is specified in the aforementioned article and it is necessary to properly account for the tax on goods and services. The necessary document for this is, in turn, a VAT declaration. It shows the output tax (resulting from the sale of goods and services) and the input tax, i.e. the tax that results from the purchase invoices. Attention!
Under Art. 193a of the Tax Ordinance, entrepreneurs are required to periodically submit to the Tax Office the so-called Uniform Control Files in the case of keeping tax books with the use of computer programs. More on this in the article: Uniform Control File - Good to Know

Presenting each item of the invoice in the VAT register and changes in the act

The provision imposed by the legislator mainly concerns active VAT payers. As already mentioned, they are required to keep records containing the data necessary for the correct preparation of tax returns and summary information. Pursuant to the Act (Article 109 (3) of the VAT Act), VAT registers must primarily contain the data necessary to determine:

  • the subject and base of taxation,

  • output tax amount (also output tax corrections),

  • the amount of input tax, as well as corrections of this tax,

  • the amount to be paid to the office or returned ex officio,

  • other data to identify the transaction - including the number used by the taxpayer for identification for the purposes of tax or value added tax.

Referring to the above provision, the entrepreneur is obliged to keep records in such a way that they contain all the above-mentioned data. However, the last point has become a problem - the act does not specify what the expression “other identification data” means. It was suggested that it would be necessary to present each invoice item separately in the VAT register. Only the individual interpretation of the Director of the Tax Chamber in Bydgoszcz from 2016 helped to resolve the matter.

VAT registers - what information should they contain?

The tax authority decided that the taxpayer, as part of the VAT register kept, will be obliged to include in it data that is to be used to identify the transaction, including the number by which the taxpayer is identified. This means that from 2017, the entrepreneur, in addition to basic information on output and input tax, must record additional data. This will be the case when transactions are concluded with entities conducting economic activity - both domestic and foreign. Then, the transactions and tax identification numbers used by the counterparties must be entered in VAT registers.

However, it is not necessary to present each invoice item in the VAT register. It is sufficient to include the contractors' data. In addition to the tax identification number, the invoice number and the date of sale must be mandatory. This will allow the full identification of the transaction.

The above interpretation was presented by the Director of the Tax Chamber in Bydgoszcz in an individual interpretation, ref. No. 0461-ITPP1.4512.761.2016.1.MN, from 8 December 2016:

(...) Consequently, the position of the Applicant should be considered correct, according to which in the records kept, after the entry into force of the new wording of Art. 109 paragraph. 3 of the Act, there is no need to present each invoice item (sale and purchase). It will be enough for the identification of individual transactions to include in the sales and purchase records the data of the parties to the transaction, including the number by which the contractor is identified for tax or value added tax purposes, and the invoice numbers and their dates of sale, which enable full identification of the transaction (. ..).

To sum up, the amendment that entered into force at the beginning of 2017 did not introduce major changes for taxpayers. Tax authorities reassured entrepreneurs who had reasons to worry. Undoubtedly, presenting each invoice item in the VAT register would be a serious inconvenience. However, the more optimistic version was confirmed that for the purpose of full identification of the transaction, in addition to basic data, it is also necessary to enter the number that identifies the taxpayer, the invoice number and the date of sale in the records.