VAT settlement invoice

VAT settlement invoice – free template

A final (settlement) invoice is issued once a transaction is complete, if one or more advance invoices were issued earlier for part of the order. This document is therefore directly tied to the advance invoice and never exists independently of it. In other words, a VAT settlement invoice summarizes the entire transaction and takes into account every payment the customer has already made.

In practice, the final invoice plays a very important role in tax settlements — it lets you correctly report VAT and the final sale value. It's especially important in industries that rely on prepayments, advances, or staged payments, such as construction, IT services, or larger commercial orders.

What does a final invoice for an advance invoice look like? You can download a fillable template (in XLSX format) from our website for free. When you download the settlement invoice template from our accounting firm's site, you can be confident the document complies with current tax law and was prepared by experienced accounting specialists.

A ready-made final invoice template helps you avoid formal errors that could cause problems during a tax audit or force you to issue corrections.

 

What must a final invoice for an advance invoice include?

A VAT settlement invoice closes out a contract or transaction and accounts for every earlier stage of the sale of goods or provision of services, including all previously issued advance invoices. A final invoice for an advance invoice must state the full transaction amount along with detailed information about the payments already made.

Importantly, the document should clearly show how much of the amount due has already been settled and how much remains to be paid. This matters for both the seller and the buyer, particularly for tax and accounting purposes.

A final invoice includes the following elements:

• the invoice issue date,
• the invoice number,
• the names of the seller and the buyer,
• the addresses of the seller and the buyer,
• the NIP numbers of the seller and the buyer,
• a description of the goods or services,
• the value of the goods or services, less the value of any earlier advances,
• the tax rates and tax amount, less the amounts already shown on the earlier advance invoices,
• a summary of the advance invoices, including their numbers,
• the total transaction amount.

It's also worth keeping the document easy to read — a clear breakdown of the advances and the final amount due makes working with business partners much easier.

 

By what deadline should a final invoice be issued?

If part of the payment was documented with an advance invoice, you must issue the settlement invoice no later than the 15th day of the month following the month in which the service was performed or the goods were delivered.

The law also allows a final invoice to be issued earlier — even before the transaction is complete — but no more than 60 days before it takes place. It's worth remembering that issuing the invoice on time affects when the VAT tax obligation arises.

Documenting sales regularly and correctly helps you avoid unnecessary complications when settling up with the tax office.

 

When do you have to issue a final invoice?

A final invoice for an advance invoice is only issued when the earlier advance invoice (or invoices) didn't cover 100% of the order value. In other words, if the customer paid only part of the amount due, the transaction must be settled at the end by issuing a VAT settlement invoice.

 

Example 1

Marek sells goods for PLN 10,000 net + 23% VAT (PLN 12,300 gross), and the customer pays PLN 6,000 net + 23% VAT (PLN 7,380 gross) as an advance, which is 60% of the order value. Marek issues an advance invoice for PLN 7,380 gross, and once the transaction is complete, he issues a final invoice for the remaining amount: PLN 12,300 – PLN 7,380 = PLN 4,920 gross (PLN 4,000 net).

The final invoice states the full value of the transaction, information about the earlier advance, and the remaining amount due.

 

Example 2

Anna sells goods for PLN 25,000 net + 23% VAT (PLN 30,750 gross), and the customer pays in two advances: PLN 10,000 net and PLN 5,000 net. Once the transaction is complete, a final invoice is issued for the remaining amount: PLN 12,300 gross.

 

When don't you need to issue a final invoice?

A settlement invoice isn't issued if the advance invoice (or invoices) already covered 100% of the order value. In that case, the advance invoice serves as the final invoice, and there's no obligation to issue an additional document.

 

Example 1

Zbigniew provides a service for PLN 4,000 net + VAT, and the customer pays the full amount upfront. The advance invoice issued covers 100% of the value — there's no need to issue a final invoice.

 

Example 2

Alicja's company receives three advances that together cover the full order value. In this situation too, no final invoice is issued, and the last advance invoice should reference the earlier documents.

 

Download the free final invoice template (XLSX)

Using ready-made accounting document templates makes life much easier for business owners. Our free VAT settlement invoice template in XLSX format lets you prepare a document quickly and correctly, in line with current regulations.

This is especially useful for small and medium-sized businesses that want to streamline their invoicing process without investing in expensive accounting systems.

 

Need accounting support?

Need help issuing advance and final invoices? Or want to make sure that, in your situation, issuing a settlement invoice is actually necessary?

Get in touch with us and make use of TaxCoach's expert accounting support. We'll help make sure your documents are correct, your VAT settlements are accurate, and your business stays tax-safe.