Which documents are required to be retained for output VAT?

The requirement to retain a comprehensive set of documents for output VAT is grounded in ensuring that businesses can substantiate their VAT transactions and compliance with tax regulations. The correct answer indicates that a full range of documentation is necessary:

Sales invoices are crucial as they provide evidence of transactions and the VAT charged to customers. Orders and delivery notes are important for verifying that goods or services were delivered as agreed and confirm the fulfillment of transactions, thus supporting the details on the sales invoices. Credit notes are essential for documenting any adjustments to sales, particularly where returns or discounts are concerned, and they also indicate changes in the VAT liability. Finally, bank records serve to further validate the flow of transactions, particularly regarding payment receipts and any relevant financial aspects of the sales.

By retaining all these documents, businesses can ensure that they are prepared for any audits or inquiries from tax authorities, improving their ability to defend their VAT claims accurately. This thorough documentation serves to establish both the liability for output VAT and the authenticity of the transactions being reported.