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What an invoice should contain

July 19, 2023
minutes of reading

What are the legal requirements for invoicing? What must an invoice contain and what can you include at will? What is the difference between a paper invoice and an electronic invoice?

What is an invoice? What are the mandatory elements an invoice must contain? Who issues invoices and what is the difference between a paper invoice and an e-invoice?

What is an invoice?

An invoice is a document that is issued by the seller to the customer and describes the actual sale of a good or service. The invoice contains information about the quantity and price of the given good or service and officially documents the amount owed by the customer.

Legal requirements for invoicing

The legal invoicing requirements apply to all traders, freelancers, agricultural producers and individuals, whether VAT registered or not.

Mandatory when issuing an invoice is:

  • to be issued as paper or electronic;
  • to be issued in 2 copies - one for the seller and one for the buyer;
  • to be issued within 5 days from the date of the tax event or advance payment.

What should an invoice contain?

The mandatory elements of an invoice /also called "requisites"/ are as follows:

  • Name: "Invoice"
  • Invoice number: a unique number, consistent on each subsequent invoice. The number must contain 10 Arabic digits.

  • Date of issue: the date the invoice was issued.

  • Vendor information: full legal name, address, UIC and VAT identification number of the vendor or service provider.

  • Information on the buyer: full legal name, address, UIC and VAT identification number of the buyer;
  • Description of goods/services: a detailed description of the goods or services provided, including quantity, unit price and applicable tax rates.
  • The tax rate - as a percentage - can be 0%, 9% or 20%. In the case of a tax rate of 0% or if for any reason tax is payable by the purchaser, the reason for this shall be entered.
  • The total amount of the goods/services described - tax base and VAT.
  • Tax event date - this is the date on which it occurred, or on which an advance payment was received.

And if the invoice is issued by persons registered under the VAT Act?

If the invoice is issued by persons registered under VAT Act, it must also contain the following elements, permanently inscribed on the invoices:

  • invoice serial number;
  • original text;
  • name - "invoice";
  • identification number of the seller/supplier;
  • VAT identification number of the seller/supplier.

Optional invoice details:

In addition to the mandatory details of an invoice, there are also optional ones that can also be added for reporting purposes:

  • payment term;
  • method of payment, e.g. details of the seller's bank account, including bank name, branch, IBAN (international bank account number) and BIC (bank identification code);
  • names of the person who delivered the goods/services;
  • names of the recipient;
  • place at which the goods/service are transferred from the seller to the buyer;
  • stamp and signature /signature may be electronic/.

Electronic or paper invoice?

In Bulgaria, electronic and paper invoices have the same legal value. The advantages of electronic invoices over paper invoices are as follows:

  • Eliminates the need for paper invoices, saving the company up to 80% in paper costs;
  • enables automated invoice processing, validation and payment;
  • simplifies the invoicing process itself;
  • eliminates errors that occur when manually entering information;
  • improves the efficiency of the invoicing process;
  • saves the company time and money;
  • helps to pay and receive what is due faster.

To take advantage of automating and streamlining your invoicing process, try the free primium version of Banqup here.

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