How Invoq classifies VAT and forms the KMD

Normally, it's the accountant's job to go through their clients' invoices, determine the VAT treatment for each, and prepare the KMD at the end of the month. Invoq automates that chain of decisions and empowers accountants — the tedious parts are handled, and the human keeps the judgement.

Why VAT treatment takes work

Let's say your business has made a multiple-item purchase from another company. A few factors come into play before you can properly classify the VAT:

• where the supplier is based,
• what kind of items were bought,
• what rates the invoice lists,
• what currency it's in,
• whether both VAT numbers are correct.

An accountant would need to go through the invoice and weigh all of those factors before deciding how to treat it. And that's just one invoice — a full month can bring hundreds.

On top of that, each decision then needs to be added to an ERP system — Merit or SimplBooks — another manual, often tedious step. It's the ERP that ultimately prepares the KMD for filing to the EMTA.

What Invoq does

Invoq automates all the manual steps and lets the accountant just use their expertise for the final judgement. For every invoice, it:

1. Reads the invoice — pulls out the supplier, line items, amounts, rates, and VAT numbers.
2. Verifies the supplier — matches it to a known party and checks the details line up.
3. Converts the amounts — brings foreign-currency invoices into your reporting currency.
4. Determines the VAT treatment — domestic, reduced-rate, zero-rated, or reverse charge.
5. Fills the KMD — including the KMD INF annex, ready for review.

If something's wrong with an invoice — a missing VAT number, a suspected duplicate, an amount that doesn't add up — Invoq flags it and lets you know exactly what's wrong, so nothing slips through silently.

You keep the final call

Invoq doesn't replace the accountant's judgement — it prepares it. Every classification comes with the decision and the factors that led to it, laid out. The accountant just needs to make the final call, then move on to the next one.

That's the point: routine invoices go through in seconds, and your attention goes to the handful that actually need it.

How Invoq extends to other accounting systems

Transferring invoice data from one system to another isn't something an accountant should waste their precious time on — Invoq is there to do it for them. It already supports the ERP systems most popular in Estonia, so once everything's approved, Invoq can export all of it to your ERP on its own — no re-typing, no copy-paste.