What Is a VAT Invoice?
A VAT invoice is a formal billing document that meets the legal requirements of a tax authority — including your tax registration number, the applicable VAT rate, and the VAT amount shown as a separate line item. It is not the same as a standard invoice with a tax line added.
The distinction matters for two reasons. First, your client may need a valid VAT invoice to reclaim input tax from their own tax authority — if your invoice does not meet the legal standard, they cannot reclaim it, which may make them push back or delay payment. Second, tax authorities can penalize businesses for issuing non-compliant invoices, even if the underlying tax was paid correctly.
You only need to issue VAT invoices if you are registered for VAT (or GST/HST). Registration is mandatory once you exceed the revenue threshold in your region — voluntary registration is possible below the threshold in most regions, and can be beneficial if your clients are VAT-registered businesses.
UAE VAT Invoice Requirements
The UAE introduced a 5% VAT on January 1, 2018. Freelancers whose taxable supplies exceed AED 375,000 in the previous 12 months (or who expect to in the next 30 days) must register with the Federal Tax Authority (FTA).
A UAE tax invoice must include:
- The words "Tax Invoice" — this exact phrase is required
- Your full legal name and address
- Your Tax Registration Number (TRN) — a 15-digit number issued by the FTA
- The invoice date and a unique sequential invoice number
- Your client's name and address
- Your client's TRN (for B2B supplies where the client is also VAT-registered)
- A description of each supply
- The quantity and unit price for each line item
- The taxable amount per line in AED
- The VAT rate applied (5% standard; 0% for zero-rated supplies)
- The VAT amount in AED, shown as a separate line
- The total amount payable including VAT
For invoices under AED 10,000, the FTA permits a simplified tax invoice that omits some client details — but the full format is recommended for all B2B supplies to ensure your client can reclaim input VAT.
Due On Time supports AED currency and 5% UAE VAT with automatic calculation. Enter your TRN once in your account settings and it appears on every invoice you create. For a free invoice generator that handles UAE VAT formatting, start at Due On Time.
EU VAT Invoice Requirements for Freelancers
EU VAT rules are governed by the EU VAT Directive (2006/112/EC), with some variation in implementation by member state. The most important concept for freelancers working with international clients is the reverse charge mechanism.
What is reverse charge? When you supply services to a VAT-registered business in another EU member state, you do not charge VAT. Instead, the client accounts for VAT in their own country. This is called the reverse charge. On your invoice, you must include both VAT numbers and the phrase "VAT: Reverse Charge" — the amount you charge is VAT-exclusive, and you do not collect or remit any VAT.
A compliant EU B2B invoice must include:
- Your full business name, address, and VAT number
- Your client's business name, address, and VAT number
- A unique sequential invoice number
- Invoice date and the date of supply (if different)
- A clear description of each service
- Unit price and quantity for each line
- Net amount per line
- The applicable VAT rate (or "Reverse Charge" if applicable)
- Total VAT amount (or "0.00 — Reverse Charge")
- Total amount payable
VAT rates vary by country and by service type. Here are the standard rates for major EU markets as of 2026:
| Country | Standard VAT Rate |
|---|---|
| Germany | 19% |
| France | 20% |
| Netherlands | 21% |
| Spain | 21% |
| Italy | 22% |
| Sweden | 25% |
| Ireland | 23% |
Due On Time's multi-region VAT fields handle EU compliance. You can enter your VAT number, your client's VAT number, and select the reverse charge option for intra-EU B2B invoices. The correct notation appears automatically on the PDF.
Canadian GST/HST Invoice Requirements
Canada has two overlapping federal consumption taxes: the Goods and Services Tax (GST) at 5%, and the Harmonized Sales Tax (HST) in provinces that have harmonized their provincial sales tax with GST. The current HST rates are: Ontario 13%, New Brunswick 15%, Nova Scotia 15%, Prince Edward Island 15%, and Newfoundland and Labrador 15%.
When do you need to register? Registration is mandatory once your worldwide taxable revenues exceed $30,000 CAD in a single calendar quarter or over four consecutive quarters. Once registered, you must charge and remit GST/HST on all taxable supplies to Canadian clients.
A CRA-compliant GST/HST invoice must include:
- Your business name (as registered with the CRA)
- Your 9-digit Business Number and RT program account (e.g., 123456789 RT0001)
- The invoice date
- A description of the supply
- The total amount charged
- An indication of which items are taxable (and at which rate) and which are exempt
- The GST/HST amount charged, shown separately
For invoices under $30 CAD, a simplified format is permitted. For invoices between $30 and $149.99 CAD, an intermediate format applies. For invoices $150 CAD or over, the full format above is required.
Due On Time includes GST/HST-ready templates for Canadian freelancers. Select your province, enter your Business Number, and the correct tax rate and format are applied automatically. This works alongside the receipt tracking features to keep your complete tax record in one place.
How to Set Up Tax-Compliant Invoices in Due On Time
Setting up your tax profile in Due On Time takes under five minutes and applies to every invoice you create from that point forward.
For UAE VAT: Go to Settings → Tax & Compliance → enter your 15-digit TRN. Select "UAE VAT (5%)" as your default tax rate. Every invoice will now include your TRN and show the VAT amount separately as required by the FTA.
For EU VAT: Enter your VAT number in Settings → Tax & Compliance. When creating an invoice for an EU client, enter their VAT number in the client details field. Select "Reverse Charge" if the supply is B2B cross-border — the invoice will include the required notation and show zero VAT.
For Canadian GST/HST: Enter your Business Number (RT account) in Settings → Tax & Compliance. Select your province — the correct HST or GST rate is applied automatically. The rate and your Business Number appear on every invoice PDF.
If you have not yet created an account, you can test the invoice format first. Create a VAT-compliant invoice free at dueontime.com/invoice/new — no sign-up required. For the complete guide to what every freelance invoice needs, see the free invoice generator for freelancers.