VAT invoice guide: what a VAT invoice must show

A VAT invoice is a tax invoice that carries enough detail for the customer to reclaim the tax you charged. The exact requirements vary by country, but the shape is remarkably consistent across value added tax systems.

What a VAT invoice usually shows

• Sequential invoice number and issue date
• Seller name, address and VAT registration number
• Customer name, address and VAT number for business transactions
• Date of supply, if it differs from the issue date
• Description, quantity and unit price of each item
• Rate of VAT per line and the total VAT amount
• Gross total payable

Inclusive versus exclusive pricing

In VAT-inclusive pricing the listed price already contains the tax: a €120 item at 20% VAT has a net value of €100 and €20 of tax. In VAT-exclusive pricing the tax is added: €100 plus 20% becomes €120. Both produce the same total here, but the invoice must state which convention it uses and show the net figure either way.

The same idea under other names

GST works on the same principle but often splits the tax across levels — CGST and SGST for an in-state supply, IGST across state lines, or a single national GST plus provincial additions. US sales tax is the outlier: it is added at checkout, charged by jurisdiction, and is frequently a separate rate per line. Choosing the right label on your invoice is what makes it look correct to the customer reading it.

Credit notes and corrections

If you need to reduce an invoice after issuing it, do not edit the original. Issue a credit note carrying its own number and referencing the original invoice — that keeps the sequence intact and gives both sides an audit trail.

Tax rules change and differ by transaction type. Use this as a working overview and confirm the detail that applies to your supply with a qualified professional.