Revenue Note for Guidance

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Revenue Note for Guidance

67. Amendments to invoices


This section sets out the rules in relation to amendments to invoices. Typically, amendments are needed when the price changes after the issue of the original invoice or when a wrong rate of VAT was charged.


(1) Subsection (1) sets out the procedures to be followed by an accountable person if the consideration is changed after he/she has issued an invoice to another accountable person. Two circumstances are provided for.

  • (1)(a) Firstly, if the consideration is increased, he/she is required to issue a further invoice setting out the amount of the increase and the appropriate amount of tax.
  • (1)(b) Secondly, if the consideration is reduced, or a discount is allowed, he/she is required to issue a credit note setting out the amount of the reduction or discount, as the case may be, and the appropriate amount of tax. (But see subsection (5) for exceptions to this rule).

Note that where an accountable person has a credit note, the amount that he or she can deduct is reduced by the amount on the credit note.

(2) Following normal commercial practice, provision is made for the substitution of a debit note for a credit note. This can be done only by agreement between the parties.

  • (2)(a) The person who issues a debit note is deemed to have received a credit note.
  • (2)(b) The person who accepts a debit note is deemed to have issued a credit note.

(3) Subsection (3) provides for the issue of a credit note cancelling an invoice where a higher rate of VAT was incorrectly charged and for the subsequent issue of a revised invoice.

Examples of where this might arise:

  • A supplier might charge VAT in relation to an intra-Community supply because he/she is not sure that the goods will leave the State, but is satisfied subsequently that the supply should have been zero-rated.
  • A supplier might charge tax on an internal supply at the standard rate when a reduced rate applied.

(4) Subsection (4) is linked to section 74(4) relating to deposits retained by a supplier in the event of a cancellation of the whole transaction by the customer. The provision allows the supplier to reduce his or her tax liability by the amount of tax accounted for on a deposit for the supply of goods or services where subsequent to that payment the customer cancels the transaction. In those circumstances the supplier must issue to the customer a document, which is to be treated as a credit note. Where the customer is an accountable person he or she must adjust his or her deductibility by the amount on that document.

By way of background, this provision was enacted following an ECJ ruling concerning deposits paid for hotel accommodation. However, it covers the VAT treatment of forfeited deposits, not alone in the hotel services sector, but also in relation to the supply of other services and goods.

(5) Accountable persons are authorised to avoid tax adjustments in regard to discounts and price adjustments in transactions between themselves. If, after the issue of an invoice, they confine the subsequent reductions to the consideration exclusive of tax, credit notes need not be issued and no adjustment of the tax liability of either party need be made.

Since any reduction in liability on the part of the accountable person issuing the credit note would be balanced by a reduction in the tax credit on the part of the person receiving the credit note, there will be no net loss or gain to Revenue if no credit note is issued.

(6) Subsection (6) sets out cases where subsection (5) does not apply. A credit note must be issued in the case of a seller who operates on the cash-receipts basis of accounting (see Chapter 4 of this Part) and also in the case of forfeited deposits (subsection (4)).

Relevant Date: Finance Act 2020