How to issue an invoice? What should be included in corrective invoices?

November 9, 2020

What is an invoice and who receives it?

If you are newbie entrepreneur and wondering how to issue an invoice – this article might be pretty helpful for you!

Let’s start with the basics – what is an invoice? In a general sense, invoice is a document that records transaction – sell, goods shipment or service. An invoice can be traditional – printed on paper, as well as electronic. Form of invoice is not as important as its content, which you will see by reading rest of the article.

You have to remember to issue your invoice twice. Once for a buyer and once for a seller, so both of them will receive one copy. Invoice buyer can be both legal and natural person. However, the invoice for natural person can be issued only at the express request. 

When should you issue an invoice?

In general, invoice should be issued on 15^thday of each monthfollowing month of sale at the latest. For example, if service was provided on 12.09.2020 seller has to issue his invoice no later than on 15.10.2020. If the invoice applies to media or rent charges, it can be issued before date of sale. But then it has to be upon the date of required payment. Other exceptions include:

• services related to printing, for example, books – 90 days from the date of service
• delivery of books, etc, – 60 days from the date of withdrawal of products
• building services – 30 days from the date of service
• energy supply, telecommunication services, permanent legal service, renting – invoice has to be issued on the last day of payment

What information should be included in an invoice?

To consider invoice as properly issued you have to put all of crucial data on it (according to the law). Your invoice must contain the following information:

• individual invoice number
• date of issue
• date of sale/service or goods delivery
• seller and buyer details – full names or company name, addresses and NIP numbers
• description of goods or services – name, quantity (with unit of measure), provision of services
• application of the VAT rate
• net unit price of one item or service
• net price – value of net unit price multiplied by quantity
• sum of net price – divided by each tax rate
• amount of tax on net price – divided by each tax rate
• amount of discount
• “MPP” designation – split payment mechanism – if split payment is obligatory for sell (if total amount owed is greater than PLN 15 000)
• Total amount owed
• GTU product group – designation that identifies sold goods and services, as well as implemented procedures.

Additionally, the invoice can contain some of the following information: legal basis for exempt from VAT, cash accounting scheme, reverse charge, mail order, notes, type and date of payment

How to issue an invoice in foreign currency?

Invoices do not have to be issued only in domestic currency. Amounts can be charged in different currencies but euro is the most often chosen by domestic contractors. Relevant phrase is the VAT rate on a document in PLN. No matter if an invoice concerns domestic or foreign transaction. Failure to provide such information is mistake. It makes invoice incorrect because it results in having no rights to deduct input tax. To calculate tax rate properly we should use NBP average exchange rate from the day preceding the day of sale. It is specified the Goods and Services Tax Act. For example, if sale took place on 30.09.2020 (Wednesday) then exchange rate that we should be interested in is dated on 29.09.2020 (Tuesday). However, if sale took place on Monday (28.09.2020) then exchange rate is dated on Friday (25.09.2020).

Corrective invoice

You have to issue a corrective invoice when after issuing a sale invoice some of positions were misplaced or the tax rate changed. Just as the sale invoice, the corrective invoice ought to have some important information included. Besides having crucial information included, corrective invoice has to contain following data as well:

• description – “CORRECTION” or “CORRECTIVE INVOICE”
• date of issue
• individual number
• annotation concerning the invoice that is being corrected – invoice number and position that is being corrected
• explanation of correction cause
• corrected amount – including each tax rate if correction changes the tax base
• correct content of corrected position

Keep in mind that seller should have confirmation of receipt in any form (e-mail, fax, written receipt, postal receipt or hand signed and sent back correction), if corrective invoice applies to reduction of the tax base.

Author: Paulina Golian

Translation: Patryk Orszulak