How to Apply VAT to Invoices

Applying VAT to Invoices

You can choose whether your prices are tax-inclusive or tax-exclusive, and the system will calculate VAT automatically.

Understand VAT options

When setting up VAT for invoices, you have two choices:

Set up tax-inclusive amounts

If your prices already include VAT:

Select Amounts Are - Tax Inclusive.
Choose a VAT rate for each line item:
- No VAT: No VAT will be applied.
- 5% VAT on income: 5% of the unit price is considered VAT.
- 20% VAT on income: 20% of the unit price is considered VAT.

The system will display the VAT amount below the invoice subtotal.

Set up tax-exclusive amounts

If you want to add VAT separately:

Select Amounts Are - Tax Exclusive.
Choose a VAT rate for each line item:
- No VAT: No VAT will be applied.
- 5% VAT on income: VAT at 5% will be added to the unit price.
- 20% VAT on income: VAT at 20% will be added to the unit price.

The system will add the VAT amount to the total and show it below the subtotal.

Can I apply different VAT rates to different items on the same invoice?

Yes, you can apply different VAT rates (No VAT, 5%, or 20%) to each line item.

What is the difference between tax-inclusive and tax-exclusive amounts?

Tax Inclusive means that the unit price already includes VAT, while Tax Exclusive means that VAT is added on top of the unit price.

Can I change the VAT rate after selecting it?

Yes, you can change the VAT rate for each line item before finalising the invoice.

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