Concept Definition
What is self-billing?
Self-billing is an arrangement in which the buyer creates the invoice on behalf of the supplier. The buyer generates and sends the invoice to the supplier, who accepts it. This is used in supply chains where buyers have better visibility of quantities and prices. EU VAT Directive Article 224 permits self-billing with conditions.
What are the conditions for self-billing?
EU VAT rules require specific conditions for self-billing arrangements:
- Prior agreement: Must be a formal prior agreement between supplier and buyer.
- Supplier acceptance: Each invoice must be accepted by the supplier.
- Invoice labeling: Invoice must clearly indicate it is a self-billed invoice.
- VAT compliance: Self-billed invoice must meet all mandatory VAT invoice content requirements.
Frequently Asked Questions
- Who is responsible for VAT on a self-billed invoice?
- The supplier remains responsible for the VAT, even though the buyer prepared the invoice. If the self-billed invoice contains errors, the supplier bears the VAT liability. This is why supplier acceptance of each self-billed invoice is a mandatory condition.
- Is self-billing common in e-invoicing?
- Self-billing is common in automotive, retail, and financial services supply chains. E-invoicing platforms support self-billing by allowing buyers to generate structured invoices (UBL, CII) on behalf of suppliers and transmit them through Peppol or PDP networks.