Legal, Finance, and Tax Teams
How does invoice processing work under power of attorney or delegated authority?
Organizations frequently issue and receive invoices processed by authorized representatives acting under power of attorney or delegated authority. Tax invoices must be issued by or on behalf of the taxable person (the legal entity making the supply). Representatives acting under power of attorney can issue invoices on behalf of the principal. Self-billing and fiscal representation are specific forms of delegated invoice authority with defined compliance requirements.
What requirements apply when invoices are issued under delegated authority?
Invoice issuance under delegation must meet specific requirements:
- Written authority: Power of attorney must be in writing and specify the scope of invoice authority
- Principal's details: Invoice must show the principal's name and VAT number, not the representative's
- Representative identification: May show 'Invoiced by [representative name] on behalf of [principal]'
- Principal's liability: The principal remains liable for VAT on invoices issued by their representative
- Revocation: Revocation of authority must be communicated to counterparties and the tax authority
- Tax authority registration: Some jurisdictions require registering authorized invoice issuers with the tax authority
Frequently Asked Questions
- Can a subsidiary issue invoices on behalf of a parent company?
- A subsidiary can issue invoices on behalf of a parent company if authorized by power of attorney or explicit contract. The invoice must show the parent company's name, address, and VAT registration number as the supplier. The parent company bears the VAT liability for these invoices. This arrangement is common in shared service center models where the SSC entity issues invoices on behalf of operating entities in the group.
- How does delegated invoice authority interact with e-invoicing mandates?
- In e-invoicing mandates, the entity in whose name the invoice is issued is the entity responsible for compliance. If a representative issues invoices on behalf of the principal, the principal's tax registration must be used and the principal's PDP or Peppol participant ID should be used for transmission. The practical configuration requires the representative to have access to the principal's compliance platform credentials or to operate under the principal's Peppol participant identity.