Valid Invoice Requirements Checklist: Complete EU Compliance Guide

Creating legally valid invoices isn't just about looking professional—it's about meeting strict legal requirements that vary by country, transaction type, and tax jurisdiction. An invalid invoice can lead to rejected tax deductions, audit issues, and payment delays. Here's your complete checklist for EU-compliant invoicing.

What Makes an Invoice Legally Valid?

A legally valid invoice must serve as proof of transaction, enable tax calculations, and provide complete information for accounting and audit purposes. While specific requirements vary by jurisdiction, certain core elements are universal across EU member states.

Core Validation Criteria

Legal Traceability: The invoice must clearly identify both parties (seller and buyer) with sufficient detail to trace the transaction back to registered businesses or individuals.

Transaction Completeness: All elements of the commercial transaction must be documented, including what was sold, when, at what price, and under what terms.

Tax Compliance: The invoice must correctly apply and display tax calculations according to the jurisdiction where the transaction occurs, including VAT rates, exemptions, or reverse charge mechanisms.

Sequential Integrity: Invoice numbering must follow a sequential, non-duplicative system that prevents gaps or manipulation of the invoice record.

Sales Invoice Requirements

When you issue an invoice to a customer, you're creating a legal document that serves multiple purposes: proof of sale, basis for tax calculations, and documentation for both parties' accounting records.

Customer Information Requirements

The level of detail required for customer information depends on whether you're invoicing a business or an individual consumer.

For Business Customers (B2B)

✅ Company Name: The full legal business name exactly as registered with the commercial register. Using trade names or abbreviations without the legal name can invalidate the invoice.

✅ Registration Number: The official company registration number from the relevant commercial registry. In the EU, this is typically the company's registration number from the national business register.

✅ VAT Number (when applicable): For B2B transactions within the EU, the customer's VAT identification number is mandatory when reverse charge applies or when the customer can claim VAT deductions.

For Individual Customers (B2C)

✅ Full Name: The customer's complete legal name as it appears on official documents. First name and last name are required at minimum.

✅ Address or Country: At minimum, the customer's country is required for VAT purposes. For services, the customer's address determines the place of supply and applicable VAT rate.

Invoice Numbering and Dates

Proper invoice numbering and dating are critical for maintaining a valid audit trail and preventing disputes about transaction timing.

✅ Unique and Sequential Invoice Number: Each invoice must have a unique identifier that follows a logical sequence. This can be simple (1, 2, 3...) or include prefixes (2025-001, 2025-002...).

✅ Issue Date: The date when the invoice is created and issued to the customer. This date determines when the transaction is recorded for accounting purposes and when VAT becomes due.

✅ Due Date: The payment deadline for the invoice. EU Late Payment Directive 2011/7/EU establishes 30 days as the standard payment term for B2B transactions unless otherwise agreed in writing. For B2C, payment terms vary by industry and contractual agreement.

✅ Service Period (mandatory for recurring services): For subscription-based and continuous services, the service period is mandatory in most EU jurisdictions. Always specify the exact period being billed (e.g., "Services rendered: October 1-31, 2025"). This is critical for SaaS and subscription businesses.

Pricing and VAT Information

Clear and accurate pricing information is mandatory for valid invoices, with specific requirements for displaying net amounts, VAT, and totals.

✅ Net Amount (excluding VAT): The base price for goods or services before any taxes are applied. In the EU, this amount should be shown in euros even if converted to another currency for reference.

✅ VAT Percentage and Amount: The applicable VAT rate (e.g., 21%, 19%) and the calculated VAT amount must be clearly shown as separate line items.

✅ Gross Total (including VAT): The final amount payable including all taxes and charges, displayed prominently as the total due.

✅ Currency Specification: The currency must be clearly indicated (EUR, USD, GBP, etc.) to avoid any ambiguity about the amount due.

Subtotal (Net):        €1,000.00
VAT 21%:                 €210.00
─────────────────────────────────
Total Amount Due:      €1,210.00
          

VAT Exemptions and Special Cases

Zero-Rated Transactions: When VAT is 0% (such as intra-EU B2B supplies with reverse charge), you must explicitly state the reason: "VAT 0% - Intra-community reverse charge" or cite the relevant article of the VAT Directive.

VAT-Exempt Services: For genuinely exempt services (education, healthcare, certain financial services), state: "VAT exempt under [relevant article/law]."

Reverse Charge Mechanism: For B2B cross-border EU transactions where the customer accounts for VAT, state: "VAT 0% - Reverse charge applies - Customer to account for VAT."

Seller Information Requirements

Your invoice must contain complete information about your business to establish legal validity and enable the customer to verify the transaction.

✅ Your Company Name: Full legal business name as registered.

✅ Your Registration Number: Official company registration identifier.

✅ Your VAT Number: Your VAT identification number when you're VAT-registered.

✅ Your Business Address: Complete registered business address including street, city, postal code, and country.

✅ Contact Information: Email address, phone number, or website for customer inquiries.

Purchase Invoice Requirements

When you receive an invoice as a purchaser, it must contain specific elements to be valid for your accounting records and tax deductions. Invalid purchase invoices cannot be used to claim VAT deductions or business expense deductions.

Recipient Details (Your Company)

✅ Your Company Name: The supplier must use your exact legal business name.

✅ Your Registration Number: Your official company registration identifier must be shown.

✅ Your VAT Number: Essential for VAT-deductible purchases, especially cross-border EU transactions.

✅ Your Physical Address: Complete business address for place of supply determination.

Supplier Information Requirements

✅ Supplier's Business Name: Legal name of the selling entity.

✅ Supplier's Registration ID: Company registration number of the supplier.

✅ Supplier's VAT Number: Required when the supplier is VAT-registered and VAT is charged.

✅ Supplier's Legal Address: Complete registered business address of the supplier.

Transaction Details for Purchases

✅ Unique Invoice Number: Supplier's invoice numbering system must be sequential and non-duplicative.

✅ Issue Date: Date when the supplier issued the invoice.

✅ Net Amount: Purchase price excluding VAT.

✅ VAT Details: Applicable VAT rate and amount, or explanation if VAT is 0% or exempt.

✅ Gross Total: Total amount including all taxes and charges.

✅ Currency: Clear indication of the currency used (EUR, USD, etc.).

Invoice Numbering Systems

Invoice numbering might seem trivial, but improper numbering is one of the most common reasons invoices are rejected by tax authorities during audits.

Legal Requirements for Invoice Numbers

Uniqueness: No two invoices can share the same number. Duplicate numbers invalidate both invoices and raise immediate audit concerns.

Sequential Logic: Numbers must follow a logical, chronological sequence. While gaps are technically allowed (e.g., voided invoices), they must be documented and explained.

Non-Modifiable: Once issued, invoice numbers cannot be changed. Corrections require credit notes or new invoices with new numbers.

Persistence: Invoice numbering systems must persist across years and cannot reset arbitrarily without proper documentation.

Common Numbering Formats

Simple Sequential: 1, 2, 3, 4... - Simplest system, works well for small businesses with low invoice volumes.

Year-Prefixed: 2025-001, 2025-002... - Organizes invoices by year, allows annual resets while maintaining uniqueness.

Customer-Prefixed: ACME-001, ACME-002, BETA-001... - Groups invoices by customer, useful for agencies and consultancies.

Multi-Part Format: 2025-Q4-001 - Includes year and quarter, useful for seasonal businesses.

Handling Voided or Cancelled Invoices

When you need to cancel an invoice, never simply delete it or skip the number:

1. Keep the Original: Retain the original invoice in your records marked as "VOID" or "CANCELLED"
2. Issue Credit Note: For already-sent invoices, issue a credit note with a new sequential number
3. Document the Reason: Note why the invoice was cancelled in your accounting records
4. Maintain Sequence: Continue numbering sequentially—the void invoice number stays in sequence

VAT Compliance Rules

Value Added Tax (VAT) requirements are among the most complex aspects of invoice validity, with rules varying by transaction type, customer location, and business registration status.

When VAT Must Be Charged

Domestic B2C Sales: Always charge your country's standard VAT rate for sales to consumers in your country.

Domestic B2B Sales: Charge VAT to businesses in your country unless specific exemptions apply.

EU Cross-Border B2C: Under the EU One Stop Shop (OSS) system, businesses can charge their home country's VAT rate if total cross-border B2C sales across all EU countries remain below €10,000 annually. Above this threshold, VAT must be charged at the destination country's rate. Digital services are always taxed in the customer's country regardless of threshold.

EU Cross-Border B2B: Apply 0% VAT with reverse charge mechanism when both parties are VAT-registered in different EU countries.

Reverse Charge Mechanism

For B2B transactions between EU countries where both parties are VAT-registered, the reverse charge mechanism shifts VAT responsibility to the buyer:

✅ Invoice Shows 0% VAT: Seller charges 0% VAT on the invoice.

✅ Reverse Charge Note: Invoice must state: "VAT 0% - Reverse charge applies - Buyer to account for VAT" or "Intra-community supply - Article 138 VAT Directive."

✅ Both VAT Numbers: Both supplier and customer VAT numbers must appear on the invoice.

✅ Buyer's Responsibility: The buyer accounts for VAT in their own country through their VAT return.

Subtotal:                €1,000.00
VAT 0% (Reverse Charge):      €0.00
─────────────────────────────────
Total:                   €1,000.00

Note: Reverse charge - Customer to account for VAT
Supplier VAT: EE123456789
Customer VAT: DE987654321
          

VAT Rates by Transaction Type

Standard Rate: Most goods and services (typically 19-27% in EU countries—Luxembourg has the lowest at 17%, Hungary the highest at 27%). Learn more about cross-border EU VAT rates.

Reduced Rate: Essential items like food, books, medical supplies (typically 5-13%).

Zero Rate: Intra-EU B2B supplies with reverse charge, certain exports.

Exempt: Healthcare, education, insurance, some financial services.

Common Invoice Mistakes to Avoid

Even experienced businesses make invoice mistakes that can lead to rejected deductions, audit issues, or payment delays. Here are the most frequent errors and how to avoid them.

Missing or Incorrect VAT Numbers

The Problem: Using outdated, incorrect, or unverified VAT numbers invalidates invoices for tax deduction purposes.

The Solution: Always verify VAT numbers using VIES before issuing invoices. Store verified VAT numbers in your customer database and recheck periodically.

Incomplete Business Registration Information

The Problem: Using trade names without legal names, missing registration numbers, or abbreviated addresses.

The Solution: Request complete legal information from all business customers at onboarding. Verify against commercial registries.

Inconsistent or Invalid Invoice Numbering

The Problem: Duplicate numbers, unexplained gaps, or non-sequential numbering.

The Solution: Use automated invoice numbering systems that guarantee uniqueness and sequential order. Document all voided invoices.

Unclear VAT Treatment

The Problem: Showing 0% VAT without explanation, mixing VAT and non-VAT items without clarification.

The Solution: Always explain VAT treatment explicitly. Use standardized notes for reverse charge, exemptions, and zero-rated supplies.

Wrong Currency or Missing Currency Designation

The Problem: Ambiguous currency symbols ($ could be USD, CAD, AUD...) or missing currency entirely.

The Solution: Always use three-letter currency codes (EUR, USD, GBP) alongside or instead of symbols.

Accepting Payment Confirmations as Invoices

The Problem: Treating Stripe receipts, PayPal confirmations, or bank statements as valid invoices for tax purposes.

The Solution: Request proper invoices from all suppliers. Use tools like CSV2Invoice to generate compliant invoices from payment processor CSVs.

International & Cross-Border Invoicing

Cross-border transactions introduce additional complexity to invoice requirements, especially between EU and non-EU countries.

EU Intra-Community Transactions

Transactions between EU member states have specific rules designed to prevent double taxation while ensuring VAT collection.

B2B Requirements: Reverse charge mechanism applies when both parties are VAT-registered. Supplier charges 0% VAT, buyer accounts for VAT in their country.

B2C Requirements: Supplier charges VAT based on the EU OSS (One Stop Shop) distance selling threshold of €10,000 across all cross-border B2C EU sales annually. Below threshold: home country VAT; above threshold: destination country VAT required.

Digital Services: B2C digital services always taxed in customer's country, regardless of threshold (EU VAT rules for digital services).

Exports Outside the EU

Zero-Rated Exports: Goods exported outside the EU are typically zero-rated (0% VAT) with proof of export required.

Services to Non-EU Businesses: Generally no EU VAT applies (0%), but invoice must clearly state: "Export supply - No EU VAT charged."

Documentary Evidence: Export invoices require additional documentation (proof of delivery, customs declarations, shipping confirmations) and must be retained for 10 years in most EU countries (retention periods vary from 4-10 years by jurisdiction). Learn more about EU invoice storage and archiving requirements.

Imports and Purchases from Non-EU Suppliers

Import VAT: Usually charged by customs at import, not by the supplier.

Reverse Charge on Services: When receiving services from non-EU businesses, you may need to self-assess VAT through reverse charge.

Invoice Requirements: Non-EU supplier invoices may not include EU VAT numbers, but must still contain complete business information.

How Automation Ensures Compliance

Manual invoice creation is prone to errors, especially when dealing with complex VAT rules, multiple currencies, and high transaction volumes. Automation eliminates these risks while ensuring consistent compliance.

Benefits of Automated Invoice Generation

Guaranteed Sequential Numbering: Automated systems ensure invoice numbers are always unique and sequential, eliminating numbering errors.

Built-in VAT Calculations: Automated VAT rules based on customer location, business status, and transaction type prevent calculation errors.

Mandatory Field Validation: Systems enforce completion of all required fields before invoice generation, preventing invalid invoices.

Consistent Formatting: All invoices follow the same professional template, ensuring compliance and brand consistency.

Audit Trail: Automated systems maintain complete records of all invoices, modifications, and cancellations.

CSV2Invoice for Compliant Bulk Invoicing

CSV2Invoice specializes in converting transaction data from payment processors (Stripe, PayPal, Shopify, etc.) into EU-compliant invoices with proper VAT handling, mandatory fields, and professional formatting.

Key Features for Compliance:

• Automatic Sequential Numbering: Guarantees unique, sequential invoice numbers across all generated invoices
• EU VAT Rules Engine: Applies correct VAT rates based on customer location and business status
• Reverse Charge Handling: Automatically applies reverse charge for intra-EU B2B transactions
• Mandatory Field Validation: Ensures all legally required information is present
• Multi-Currency Support: Clear currency designation for international transactions
• Bulk Processing: Generate hundreds of compliant invoices in minutes

When to Use Automation

High Transaction Volume: If you issue more than 20 invoices per month, automation saves significant time.

Multiple VAT Scenarios: When dealing with B2B/B2C, domestic/cross-border, automation ensures correct VAT treatment.

Consistency Requirements: Automated systems eliminate variations and errors in invoice formatting.

Audit Preparation: Complete audit trails and guaranteed compliance reduce audit risks.

Conclusion: Valid Invoices Are Non-Negotiable

Creating legally valid invoices isn't optional—it's a legal requirement with real financial consequences. Invalid invoices can lead to rejected tax deductions, audit penalties, and payment disputes that cost far more than the time invested in getting invoices right.

The good news: Once you understand the requirements and implement proper systems (ideally automated), invoice compliance becomes routine rather than risky.

Remember: Proper invoices protect both parties, enable tax deductions, and demonstrate business professionalism. When in doubt, include more information rather than less—comprehensive invoices are never rejected for being too detailed.