TLDR: If you make a VAT invoicing error, you must correct the invoice and justify the correction to the tax authorities. The procedure depends on the type of error: cancellation, termination, non-payment, or incorrect VAT application. The request for refund or offset must be submitted before December 31 of the second year following the error.
Types of errors and correction obligations
VAT invoicing errors can be divided into two main categories: formal errors and substantive errors. Formal errors include applying an incorrect rate or charging VAT for an exempt transaction. Substantive errors relate to canceled, terminated, or unpaid transactions.
Canceled, terminated, or unpaid transactions
For canceled, terminated, or unpaid transactions, you must issue a credit note referencing the original invoice. This note must indicate the tax-exclusive (net) amount of the discount or cancellation and the corresponding VAT. For unpaid invoices, you must send a duplicate of the original invoice with a clear note indicating the unpaid amount and the non-deductible VAT.
Exempt transactions or incorrect VAT rate
If you applied VAT to an exempt transaction or used an incorrect rate, the wrongly charged VAT is not deductible by the customer and remains payable by you, unless directly regularized with the recipient. In this case, the customer must first contact you to obtain a correction.
Correction procedure and required documentation
Correcting an invoice with a VAT error requires issuing specific documents and, in some cases, submitting a formal request to the tax authorities.
Cancellations, terminations, or non-payments
- Issue a credit note referencing the original invoice, indicating the net amount of the cancellation or discount and the corresponding VAT.
- Send a duplicate of the original invoice with an explicit note about the non-payment and non-deductible VAT.
Exempt transactions incorrectly charged with VAT
- Contact the customer to regularize the situation, possibly by issuing a new invoice without VAT.
- Pay the VAT if the customer has already deducted the tax and it cannot be recovered.
Deadlines and corrections in VAT returns
Compliance with deadlines is crucial to avoid losing the right to a refund or VAT offset. The request must be submitted before December 31 of the second year following the error. For example, if a transaction is canceled in 2024, the refund request must be submitted before December 31, 2026.
Errors in VAT returns
If you made an error in your VAT return, such as an undue deduction or insufficient payment, you must correct the return and, if necessary, repay the incorrectly deducted VAT credit. This may result in penalties.
Non-correctable errors and deduction limits
Some VAT invoicing errors cannot be corrected retroactively. For example, if VAT was incorrectly charged for exempt transactions or with the wrong rate, it is not deductible by the customer and remains payable by you, unless directly regularized with the recipient. Additionally, if VAT was wrongly deducted for goods or services excluded from the right to deduction, it must be repaid in the next return.
Submission methods: online or paper
For paper corrections, you must:
- Send a duplicate of the original invoice with the required notes for non-payments.
- Issue a credit note for cancellations or terminations, referencing the original invoice and corrected amounts.