In everyday business life in Austria, it is often the case that you have to cancel invoices or correct them retrospectively; the reasons for this are of a complex nature. In this context, ambiguities and irritations sometimes arise due to misinterpreted formal requirements regarding invoice correction as well as explicit regulations regarding cancellation invoices and credit notes. In principle, you can correct errors in the original invoice by means of an invoice correction. You must keep in mind: If the first invoice has already been entered in the accounts, you must assign a self-sufficient invoice number to the corresponding invoice correction. Only if the original invoice has not yet been processed in accounting, the existing invoice number can still be used.
Issuing credit notes generates sustainable benefits
In the meantime, however, it is also common practice in Austria to issue a corresponding credit note. This makes sense especially if, for example, goods that are still unpaid for are never picked up by the invoice recipient, but an invoice has already been issued in this regard. Also in the case of significant errors in the course of invoicing, it is advisable under certain conditions to issue a credit note instead of a correction code. Thereby the errors and/or. Defects however always within fewer days after the calculation production to have been noticed; besides the business field plays due to the respective specifications a substantial role with the decision for a correction code or even for the issuing of credit notes. It is important that you inform the invoice recipient of this procedure and that the issued credit note contains both the invoice itself and the invoice number.
Especially in the sales tax law the handling of credit notes is in focus
If the respective invoice recipient is subject to a tax audit, the credit memos you have issued must have been taken into account in accounting. If this is not the case, however, the invoice recipient will be in dire straits when it comes to providing explanations to the Austrian tax authorities. To avoid such a scenario, the sending of credit notes and invoices contained therein should always remain traceable. Ideally, the invoice recipient confirms receipt of the credit notes. This way, you do not have to explain this issue to the Austrian tax authorities and save yourself inconveniences. For the purposes of VAT law, credit notes are regarded as documents which show that the burden of settlement lies with the respective service recipient.
Credit notes also function as quasi reverse invoices
Credit notes, on the other hand, fulfill two essential functions in the context of commercial practice. On the one hand you can use credit notes thereby as a kind of reversed calculation. This means that designated credits take the place of an invoice issued to the recipient of the service. This is the preferred procedure in Austria for paying commissions. On the other hand, in ordinary business transactions, for example, price reductions due to, say, material defects are called credits. In principle, credit notes have the same obligatory contents as classic invoices, but they do not have to show payment data.