Input VAT deduction: why your supplier's invoice is your problem

The VAT your business pays on its purchases — input VAT — is not a final cost for a registered business: it is deducted from the VAT on your sales (output VAT) in your return, so you effectively bear only the difference. But that deduction does not rest on trust or on a bank statement — it rests on its document: a valid tax invoice.

What makes an invoice deductible

To rely on a supplier's invoice for input-VAT deduction, you fundamentally need:

1. A full standard tax invoice, not a simplified one — in your business's name with your VAT registration number. A simplified invoice is a consumer sales document, not a deduction document.
2. Sound supplier data: their legal name and VAT number — both verifiable.
3. A purchase tied to your taxable activity: input VAT is deductible to the extent the purchase serves taxable activity, and some items carry blocking or restriction rules in the regulations — review those with your accountant.
4. Deduction within the time window the framework prescribes.

What e-invoicing changed here

In the paper world, a defective invoice was discovered at return time or at audit — months too late. In Phase 2, your supplier's standard invoice passes clearance with the Authority before it reaches you. The invoice in your hands has already passed the validation rules: fields complete, structure sound, source a registered unit.

This protects the buyer specifically: your deduction document is on record with the Authority from the moment it was issued.

Habits that protect your deduction

• Give suppliers your complete details — legal name and VAT number — and insist on a standard invoice, not a simplified one, for every business purchase.
• Check invoices on receipt, not at return time: your details correct? The supplier's details sound?
• Tie every correction to its note: a price change or a return means a credit note from the supplier, and your deduction adjusts with it — not with a verbal understanding.
• Store purchase invoices as carefully as your sales invoices; both are your record in front of an examiner.

The bottom line: your right to deduct is only as good as your documents. A system that keeps purchase and sales invoices in order together — as alFatora does — turns your return into a direct reflection of a sound record, not a manual roll-up that hunts for its own mistakes.