vat-invoice-checker

VAT Invoice Checker

This skill performs a batch compliance review of supplier invoices against the content requirements of the EU VAT Directive 2006/112/EC (principally Articles 226-231). It is for indirect tax teams, accounts-payable controllers, and auditors who need to confirm that invoices carry every mandatory particular before input VAT is recovered or before a return is filed. It works only on the invoice data you provide in your session and produces a structured exceptions report flagging missing or inconsistent fields.

When to use this

• Reviewing a batch of purchase invoices before claiming input VAT deduction (Article 178 requires a valid invoice held by the customer).
• Pre-filing data quality checks on sales or purchase ledgers ahead of a periodic VAT return.
• Indirect tax audit testing or internal control sampling over a population of invoices.
• Validating cross-border invoices for correct reverse-charge or intra-Community supply mentions.
• Cleaning up an AP master file where invoice metadata quality is unknown.

Inputs

Provide a folder of invoices, or a single tabular extract, with one row per invoice. A CSV (preferred for batch) or Excel sheet works best. See the bundled sample samples/sample_invoices.csv.

Expected columns (header names may vary; map them at the start):

• invoice_id / sequential number
• issue_date (and supply_date / tax point if different)
• supplier_name, supplier_vat (VAT identification number)
• customer_name, customer_vat
• description (nature of goods/services, quantity)
• net_amount (taxable amount per rate)
• vat_rate (%)
• vat_amount
• gross_amount (optional; for cross-foot)
• currency
• special_mention (e.g. "reverse charge", "exempt", "intra-Community supply", "margin scheme")

If invoices are individual PDFs or images, ask the user to extract the fields into a table first (or transcribe the visible fields), then run the checks. Do not invent values; flag anything illegible as UNREADABLE.

How to do it

Work from the EU VAT Directive 2006/112/EC. Article 226 lists the mandatory particulars of a full invoice. Apply the following checks per invoice row.

1. Sequential number (Art. 226(2)). Confirm invoice_id is present and non-blank. Across the batch, check the numbering is unique (no duplicates) and note gaps if the population claims to be a complete sequence. Flag duplicates as a high-severity exception (risk of double deduction).

2. Date of issue (Art. 226(1)). Confirm issue_date is present and a valid calendar date. If a separate supply_date / tax point (Art. 226(7)) exists and differs materially, retain both; the tax point drives the period of recovery.

3. Supplier VAT identification number (Art. 226(3)). Must be present. Validate structure against the EU country format for the country prefix:

   • Format is a 2-letter ISO country code prefix plus the national number, e.g. DE + 9 digits, FR + 2 chars + 9 digits, NL + 9 digits + B + 2 digits, BE + 10 digits, IT + 11 digits, ES + 9 chars, IE + 8-9 chars, PL + 10 digits. (Note: since the VIES system replaced the old GB prefix for EU purposes, treat GB/XI numbers per current rules.)
   • Apply a structural/length check per prefix. Where the country uses a check digit (e.g. the DE 9-digit modulo, or the IT/ES algorithms), verify it if you can; otherwise flag for VIES confirmation. State clearly that structural validity is NOT proof of an active registration - recommend a VIES lookup for cross-border deduction.

4. Customer VAT number (Art. 226(4)). Required where the customer is liable to pay the tax (reverse charge) or for an intra-Community supply of goods. Apply the same structural validation. Flag a missing customer VAT number specifically when special_mention indicates reverse charge or intra-Community supply.

5. Supplier full name and address; customer full name and address (Art. 226(5)). Confirm supplier_name and customer_name are present and non-generic. Flag blanks or placeholders ("Customer", "Cash sale").

6. Description of goods or services (Art. 226(6)). Confirm description is present and specific enough to identify the supply (quantity/extent). Flag empty or vague entries ("Services", "Sundry") as a medium-severity quality issue.

7. Taxable amount, unit price, rate, and VAT amount (Art. 226(8)-(10)). For each rate present:

   • net_amount, vat_rate, and vat_amount must all be present.
   • Recompute: expected VAT = round(net_amount x vat_rate / 100, 2). Flag if the stated vat_amount differs from the recomputed figure by more than a rounding tolerance (suggest 0.02 per rate line, or 1 cent times the number of lines). This catches transposed digits and wrong rates.
   • If gross_amount is supplied, cross-foot: net_amount + vat_amount should equal gross_amount within tolerance.
   • Sanity-check the rate against plausible national rates (most EU standard rates fall between 17% and 27%; reduced/zero rates exist). Flag an implausible rate (e.g. 0% with a positive VAT amount, or a rate not used in the supplier's country).

8. Required special mentions (Art. 226(11)-(11a) and related). Conditional checks:

   • Reverse charge: where the customer is liable, the invoice must carry the words "Reverse charge" (Art. 226(11a)) and vat_amount should be zero/blank. Flag a reverse-charge invoice that nonetheless charges VAT, or one liable to reverse charge but missing the mention.
   • Exempt supply: must reference the exemption (Art. 226(11)). Flag a 0% / exempt line with no special_mention.
   • Intra-Community supply of goods: expect zero-rating plus both VAT numbers and (best practice) an exemption reference; the customer VAT number is mandatory.
   • Margin schemes / special schemes: must state "Margin scheme - ..." or "Cash accounting" (Art. 226(11a)-(14)) as applicable.
   • Self-billing: if applicable, must state "Self-billing" (Art. 226(10a)).

9. Currency and consistency. Note the currency. Per Art. 230, amounts may be in any currency but the VAT payable must be expressed in the national currency using a valid exchange rate. Flag mixed-currency batches for manual review.

10. Simplified invoices. If the gross is below the national simplified-invoice threshold (Art. 220a / 238; commonly around EUR 100, but country-specific), a reduced data set may be acceptable. Do not force full-invoice failures on clearly simplified invoices, but note the assumption and the threshold used.

Assign each exception a severity: High (blocks input-VAT recovery - e.g. missing supplier VAT number, VAT miscalculation, duplicate number), Medium (compliance gap needing correction - vague description, missing mention), Low (advisory - formatting, VIES recommended).

Output

Produce two artifacts.

1. Exceptions report (CSV or Markdown table) named vat_exceptions_report.csv with columns: invoice_id, supplier_name, supplier_vat, check_id, requirement (Article ref), severity, finding, expected_vs_actual, recommended_action One row per failed check. Pass invoices need not appear, but include a count.

2. Summary memo (Markdown) with: population size and total value reviewed; count of invoices clean vs with exceptions; breakdown by severity and by check; a duplicate-number list; and a short "preliminary analysis" narrative of the main risks (e.g. "12 of 80 invoices lack a structurally valid supplier VAT number, putting input-VAT recovery at risk pending VIES confirmation"). End the memo with the disclaimer.

Quality checks

• Confirm column mapping before running; mislabeled columns produce false exceptions.
• Use a stated rounding tolerance and disclose it; do not raise exceptions inside the tolerance.
• Distinguish structural VAT-number validity from active registration - never assert a number is valid for VIES purposes; recommend the lookup.
• Do not treat a legitimately simplified invoice as a failed full invoice; state the threshold assumption.
• Watch for date formats (DD/MM vs MM/DD); normalize before validating.
• Reverse-charge logic is the most error-prone: verify both the mention AND the zero VAT, and that the customer VAT number is present.
• Never auto-correct the source data; report only.

Worked example

Using samples/sample_invoices.csv (5 fictional invoices):

• INV-1001 (Aurora Components Ltd, DE supplier): net 1,000.00 at 19%, VAT stated 190.00. Recompute 1,000.00 x 19% = 190.00 - passes the arithmetic check; supplier VAT DE123456789 is structurally valid (DE + 9 digits). Clean.
• INV-1002 (Northwind Trading BV, NL): net 500.00 at 21%, VAT stated 95.00. Recompute = 105.00. High exception: VAT miscalculation (expected 105.00, actual 95.00, delta 10.00) - likely wrong figure; blocks recovery until corrected.
• INV-1003 (Helios Software GmbH): supplier VAT blank. High exception under Art. 226(3): missing supplier VAT identification number.
• INV-1004 (Meridian Logistics SARL, FR, cross-border): special_mention = "reverse charge" but vat_amount = 84.00. High exception: reverse-charge invoice should not charge VAT, and Art. 226(11a) mention present but inconsistent; verify customer VAT number is shown.
• Fifth row reuses the number INV-1001 (Borealis Energy AS, electricity supply): High exception: duplicate sequential number (Art. 226(2)), since INV-1001 already appears on the first row - double-deduction risk.

The report would surface four exceptions across five invoices, one clean, framed as preliminary analysis pending VIES confirmation and professional review.

Disclaimer

Disclaimer: This skill is a drafting and analysis aid, not professional advice. It does not provide accounting, audit, tax, investment, or legal advice. All output must be reviewed and approved by a qualified professional before use or reliance.

Because this is a tax skill: every generated determination or position (VAT validity, deductibility, reverse-charge treatment, registration status) must be framed as "preliminary analysis - verify with a qualified tax advisor", and NEVER presented as a definitive position. Structural VAT-number checks are not confirmation of an active registration; confirm via the official VIES service.

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