Statutory Requirement for VAT Invoices

Requirements to issue VAT invoices and account for VAT due within the proper time limits - Sections 17(1) and 19(2) VAT Act 1972.

Background

Following audits carried out on a number of cases involving persons providing professional services it was discovered that VAT invoices had not been issued within the proper time limits as laid down in the VAT Acts. This resulted in VAT not being accounted for to the Revenue Commissioners at the correct time.

Where such persons are not authorised to account for VAT on the cash receipts basis but are obliged to use the invoice basis, the date of completion of the service and the date of issue of the invoice become very important. These dates determine when the VAT chargeable becomes due.

Correct Procedures

This opportunity is being taken to remind practitioners and taxpayers of the need to issue invoices and account for VAT due within the required time limits:

• Where services are supplied to customers who are registered for VAT a VAT invoice must be issued within 15 days of the end of the month in which the service is completed. In such cases VAT becomes due on the date the invoice issues or if an invoice is not issued, VAT is due on the date when the time limit for the issue of such an invoice expires.
• Where services are supplied to customers who are not registered for VAT the tax becomes due on the date the service is completed.

Where the service consists of a single transaction there is no difficulty in determining when the service is completed. A service consisting of several connected transactions will usually be regarded as having been completed when the last of the connected transactions is carried out.

Inspectors may request evidence to show that a service is still ongoing and has not, in fact, been completed.

Where an interim payment is received on an ongoing service, VAT becomes due immediately and a VAT invoice covering such payment must be issued within the prescribed time limit.

Conclusion

Where it is established that payment of VAT correctly due in a particular accounting period was delayed or is still outstanding, then Revenue will pursue collection of the liability by reference to the correct accounting period together with interest and penalties as appropriate.