What is a debit note?

Updated on February 8, 2022

Credit notes

As long as the customer sends the supplier a debit note, the supplier treats it as a credit note. Suppliers need to accept debit notes before they can give them credit notes. Before they can give them credit notes, they must give them debit notes.

In order for a debit note to be a credit note, it must include all the information that should be on one.

Overview

Here are the main points:

who must issue a VAT credit note and what information must be on a VAT credit note are some of the things you need to know:

What is a VAT credit note?

Customers get a credit note from a supplier when they buy something from them. This is a way for them to get money back from the supplier. This shows that the price of the goods or services that were sold has been cut, or that a discount has been given. A credit note is a form of proof.

When you know why VAT credit notes are important, you can better understand why they are important.
Information on a credit note helps you figure out how much VAT you have to pay when you sell goods or services that are taxed to you.

They can also change how much VAT they pay on the things they buy.

if you write down a credit note that shows less VAT than it should, you have to pay for the difference in the amount.

When must a VAT credit note be issued?

It is important to give a VAT credit note to someone else when it is due.
If they want to change their Value-Added Tax (VAT) bill, they write a VAT credit note and sign it.

Original invoice: VAT rate was wrong, so we had to make a new invoice to pay for the goods
There are rules for getting credit notes. You must give them to someone within 15 days of the last day of the month that you sold or gave them something to get one.

It doesn’t need to be made when.
To give your customer money back, you don’t need to change the VAT that you have to pay.

What information is required on a VAT credit note?

This is what you need to show on your Value-Added Tax (VAT) credit note.

the date that a unique number was made
a supplier’s full name and address, as well as their VAT number
in case of an intra-Community sale, your full name, address, and VAT registration number. In case of an inter-Community sale: your customer’s VAT identification number in the other Member State.
a link to the original invoice
the new consideration
how much tax was paid at each rate that was in effect when an invoice for that tax was sent out at the time.
Foreign money on a VAT invoice
If your credit note has a foreign currency on it, it must also have the same amount in euros.

During the time when your invoice is going to be sent out, you should use a rate that the Central Bank has.

If you agree with Revenue, you can use a different way to figure out the exchange rate. That’s only if you use the agreed method for all of your foreign exchange transactions.

You should apply to your local Revenue District to let them know what method they plan to use to figure out the exchange rate.

What is a debit note?

As long as the customer sends the supplier a debit note, the supplier treats it as a credit note. Suppliers need to accept debit notes before they can give them credit notes. Before they can give them credit notes, they must give them debit notes.

In order for a debit note to be a credit note, it must include all the information that should be on one.