If you are a small seller, the VAT on a sale you have not been paid for is money you do not have. Most VAT rules do not care. You send the invoice, you owe the VAT, whether the customer has paid or not.
Several EU countries have a version that treats this differently: VAT falls due when you are paid, not when you invoice. The rule is called something different in each country, and mixing them up is one of the common ways to file a return that will not match your books.
Two ways VAT can be timed
Accrual (standard). VAT is due in the period you issued the invoice. The customer’s payment does not change the period.
Cash-basis. VAT is due in the period the payment arrives.
Three things are the same in every country that offers a cash-basis option: it is for small businesses, it is opt-in or automatic below a threshold (never forced on larger sellers), and if you book VAT to the invoice date when you should be using the payment date your return will not match reality.
Germany — Istbesteuerung
Germany calls its cash-basis option Istbesteuerung, “actual taxation,” set out in §20 UStG. The accrual default is Sollbesteuerung, §16 UStG. It is available to small businesses under the turnover threshold, and it applies to both your output VAT on sales and your input VAT on incoming invoices. Both use the payment date, not the invoice date.
Poland — metoda kasowa
Poland’s version is metoda kasowa, “cash method,” available to a mały podatnik — a small taxpayer, around €2,000,000 in gross annual sales (the threshold is set each year in PLN). VAT is settled on the date payment is received. Every sales invoice you issue under this method must carry the phrase “metoda kasowa” on the document itself.
One point often missed: for sales to consumers and other non-VAT-registered buyers, VAT is due no later than 180 days from delivery, paid or not.
France — TVA sur les encaissements
France splits the rule by what you sell. Goods sellers use TVA sur les débits (VAT due on the invoice date). Service providers use TVA sur les encaissements (VAT due when payment is collected). For services, cash-basis is the default; you do not opt in. Service businesses can elect débits if they prefer, but encaissements is the starting point.
Where it usually goes wrong
The mistake is almost always the same. A bookkeeping process, manual or automated, files a transaction into a VAT period using the invoice date, because the invoice date is the one on the paper. If the seller is supposed to be using the payment date, this becomes wrong on every invoice, and nobody notices until a tax office query or a year-end reconciliation.
The rule is the easy part. The date is the hard part.
Understanding that VAT is due on the payment date is straightforward. Knowing which bank transaction paid which invoice, and on what date, is the work.
Once you add partial payments, batched marketplace payouts covering dozens of orders at once, bank fees, rounding, and early-payment discounts, matching bank lines to invoices by hand takes real time every period. Sellers we meet handle this in one of three ways: they do it themselves each month, they pay their tax accountant to do it, or they give up on cash-basis and set VAT aside as if they were on accrual anyway. The third one is the most common, and it quietly cancels the cashflow benefit they were supposed to get.
What runs today in Vedron
For German Istbesteuerung, this is built and running. Every invoice is matched to the bank transaction that paid it. VAT reporting uses that matched payment date. When a match has not been found yet, the system falls back to other signals, never to the invoice date by default. Our team has already used this to correct real historical invoices that had been filed on the wrong date. No one reconciled a line by hand.
Polish metoda kasowa and French TVA sur les encaissements are on the roadmap. The bank-matching engine underneath is the same one running the German case, so what is left is the country-specific tax handling. If either is on your critical path, tell us. We move things up when a real customer is waiting.
Common questions
Can I switch to cash-basis VAT at any time? It depends on your country’s rules and thresholds. There are usually turnover limits, a business-type check, and sometimes a minimum period once you switch. Ask your tax advisor before you file the switch.
Does cash-basis change what I owe, or just when? Just when. Over time, the total VAT is the same either way. What moves is which period a given sale lands in.
What happens to unpaid invoices at year-end? Under cash-basis, VAT on an unpaid invoice is generally not yet due. It becomes due in the period the payment arrives, with the country-specific backstops above (Poland’s 180-day B2C rule, for example).
Do I have to match every payment to its invoice myself? In Vedron, no. That matching is done automatically, so the payment date used for VAT reporting is already resolved by the time you open your return.
Does this help cashflow, or save time? Both, and they are linked. Without confident matching, most sellers set VAT aside as if they were on accrual, which erases the cashflow benefit cash-basis is supposed to give. Automatic matching is what lets you rely on the payment-date rule day to day.
Talk to us about your setup
Every seller’s mix of marketplaces, currencies and payment methods is a little different. Book a short call and we will walk through yours with you, on your real books. Beta clients get their first two months of custom setup on us; if you need more time than the standard trial, ask.