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Re-invoicing - it's even easier with us!

Re-invoicing is a way of passing on the invoice that is increasingly being used by businesses. Re-invoicing of utilities for rentals is also very popular. However, searching through the codes to find the regulations explaining what this process entails is of no use – nowhere are the rules on how to issue a re-invoice specified. What should you do in a situation where you would like to re-invoice services but don’t know how? You are not sure what you can and cannot re-invoice? Or perhaps your doubts are about VAT accounting? If you turn to FA Partners for help, you can be sure that all the formalities in this area will be completed professionally, with the greatest attention to detail and by the deadlines. Thanks to us, re-invoicing will be even easier!

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What is reinvoicing?

Re-invoicing involves reselling goods or services to another company at the same price, without charging any commission or margin. Usually, any costs are then transferred to the entity that actually uses the service or good. However, it is understood that the concept of re-invoicing mainly applies to the service sector.

A good example of re-invoicing is the rental of an entrepreneur's property. Utility bills are received by the property owners, but they re-invoice so that the business person can account for the costs within their business. The sole trader is then entitled to include the bills as an expense, even though his or her name does not appear on them.

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Why entrust a professional company with re-invoicing?

Re-invoicing is an extremely convenient way to settle costs between businesses. For this reason, it is advisable to use re-invoicing in every situation where it is possible. However, issuing a re-invoice is not always possible. It is worth asking for advice from a professional office from which the re-invoicing process has no secrets.

FA Partners has been handling the accounting and financial needs of companies for years. Our experts will advise you on the financial management of your business. We will tell you when and in which situations you can use re-invoicing and what benefits this process brings. If it turns out that another solution would be more fruitful for your company, we will suggest it to you. Our priority is to provide our clients with the highest quality service that will allow them to grow their businesses.

No code specifies the rules for re-invoicing and for this reason the whole process seems a little complicated. By using our services, you will be assured that you will not make a mistake with regard to re-invoicing and you will not face any unpleasant consequences related to the incorrect settlement of a re-invoice.

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What elements does reinvoicing consist of?

The regulations do not specify what exactly a re-invoice should look like, so it is issued according to the general rules. In practice, the document therefore looks like a 'normal' invoice. However, in order to avoid misunderstandings, businesses usually include a note on the document that makes it clear that it is a re-invoice. The re-invoice should also contain all the elements of a traditional VAT invoice, i.e:
date of issue,
the consecutive number of the document, which allows for identification of the invoice,
names and addresses of the seller and buyer of goods or services,
Tax Identification Number of the seller and the buyer of goods or services,
the date on which the supply of goods or services was made or completed or the date on which the payment was received if the payment was made before the sale (provided that the date is specified and different from the date of the invoice),
the name of the good or service,
the net and gross sales value and the VAT amount.

However, there are situations where the issuance of a re-invoice is not possible. You cannot re-invoice costs that are only ancillary to the underlying service. Why? Such costs make the taxable base of these activities increase and for this reason they should not be re-invoiced separately. Thus, all expenses that are considered to be an integral part of the basic service should be included in the main price.

What about VAT on a re-invoice?

According to the VAT Law, tax liability arises at the time the goods are delivered or the service is performed, or at the time the invoice is issued (provided that this occurs no later than the 15th of the month following the month in which the service was performed or the goods delivered). It is in the interest of the parties to see to this deadline. It should also be remembered that the tax base is everything for which the supplier (or service provider) has received payment. If any additional costs are involved, they should be included in the taxable amount of the main service.

Importantly, the person issuing the re-invoice should use the same VAT rate as that used on the original invoice. In a situation where the service was purchased by a taxpayer who is exempt from VAT, the invoice does not include the amount of VAT. Then the reseller is obliged to charge on the re-invoice the rate that would have been charged in a situation where the entity was an active VAT taxpayer.

Translated with www.DeepL.com/Translator (free version)