What is an internal invoice?
The internal invoice was a type of accounting document that was commonly used by companies until December 2013, but only under certain circumstances. We are talking about situations in which the activity performed did not entail the need to issue an invoice, but at the same time gave rise to an obligation to pay tax – for example, when the company rendered a free service or acquired goods intra-Community.
Currently, an internal taxation document is used, the purposes and functions of which are similar to the internal invoice.
Is it a good idea to issue internal invoices?
This raises the question of whether issuing internal invoices, or rather internal taxation documents, is in any way justified when there is no need to do so? The decision is up to the entrepreneur, but it is worth knowing that an internal tax invoice can be very useful. Its main advantage is that it helps keep the company’s accounting documents in order.
An internal document performs two functions in enterprises:
- first: it can be helpful in calculating the VAT due for payment,
- second: it allows you to reconstruct at any time the information on the activities carried out.
Issuing internal documents is therefore a good practice, so that the entrepreneur will easily be able to go back to past transactions when needed.
When can an internal taxation document prove useful?
Issuing an internal invoice can come in handy, especially for those activities that require the payment of VAT internally. For example:
- in a situation where there has been a gratuitous transfer of goods or provision of services,
- when it comes to repayment of funds received under grants and various types of subsidies,
- in the case of intra-Community acquisition of goods (ICT),
- in the case of intra-Community acquisition of services.
It is worth mentioning that companies issue internal documents most often precisely when documenting intra-Community transactions.
What data should be included on such an invoice?
If you are planning to issue an internal taxation document, be sure to check what data should be included on it. The use of a single document template will make it a little easier to keep your documents in order and will certainly make it more efficient to reach this information in the future.
Data on the internal document:
- date of issuance of the document,
- date of transfer of goods or provision of services,
- identification number – it is worth adopting a numbering that will allow clear identification of the document,
- basic data on the parties to the transaction, such as the names of the entities, tax ID numbers, addresses, other contact information,
- information about the exchange rate at which the invoice amounts were converted, if the transaction was made in a foreign currency,
- information about the type of transaction, as well as its subject matter,
- information on taxation – tax base, VAT rate (if any – if not, information on 0% VAT rate), as well as VAT value.
Important!
Note that on the internal taxation document there is no information about the amount to be paid. This is because the document deals with gratuitous transactions.
Internal document of taxation – what constitutes the tax base?
VAT deduction proceeds in the same way with the internal taxation document as it did with the internal invoice until 2013. If there is no information on the tax base and thus also on the amount of VAT on a given document, the taxpayer has the right to add such information. It can also add to the document data on the amount of VAT charged, along with information on the exchange rate at which the amount was charged.
A characteristic feature of an internal document is the absence of a recipient – the taxpayer issues an internal taxation document only for his own purposes and to – if necessary – prove the charging of VAT.
Internal document and internal invoice – summary
Although internal invoices have not functioned in the tax circuit since 2013, we can still encounter this name for the document. However, wanting to be accurate, entrepreneurs should use the title “internal document of taxation.” The new nomenclature, although several years old, still needs time to be accepted in the minds of businesses.
Meanwhile, it is worth remembering that we use the internal document only for gratuitous transactions that do not trigger the obligation to issue an invoice. An internal document thus serves, as the name implies, the internal needs of the company and as such remains at the disposal of the company. Thus, it does not have a recipient to be indicated when issuing the document. However, it can be presented as evidence of the correct calculation of VAT.
