What defines a 'tax invoice' in the context of VAT?

A 'tax invoice' in the context of VAT is specifically defined as an invoice that clearly shows the amount of VAT charged on a transaction. This is crucial for both the buyer and the seller; for the seller, it provides evidence of the tax charged that must be reported to tax authorities, while for the buyer, it serves as proof of their right to claim input VAT if they are eligible to do so.

The inclusion of the VAT amount on the invoice is a legal requirement in many jurisdictions for it to be considered valid for VAT purposes. This ensures that the transaction is documented in a way that maintains transparency and compliance with VAT regulations. In this context, a tax invoice must detail the VAT amount alongside the total price, helping to streamline tax reporting and obligations.

Understanding the other options highlights why they do not fit the definition of a tax invoice. An invoice without any tax amount does not serve the purpose of documenting VAT transactions. A generic receipt provided to customers lacks the specific details required by tax authorities, and an invoice that presents only a subtotal before tax does not fulfill the requirement of indicating the VAT amount charged. Thus, the correct answer reflects the essential characteristics of a tax invoice in compliance with VAT regulations.