Having business always includes obeying the financial laws within the territorial country. In the European Union and most of Asia, there are imposed taxes on goods and services.
VAT or Value Added Tax is another one of new complexity in financial laws so revenue stream can keep flowing and go unabated. Business needs to create invoice template with Value Added Tax or VAT. So they can be accountable in the face of the law and government when said business undergoes any official audit. This is a form of consumption tax, so it imposed on varieties of goods and services the consumer must pay for as part of the end price.
How VAT Works
When a business sells an item or service subject to value-added tax, it collects the tax directly from the buyer. The company then deducts any VAT on its purchases in the same accounting period, rather than gathers everything. For example, a business receives Rp500.000 in tax from customers but also spent Rp300.000 paying VAT on its purchases. That business only collects Rp200.000, not all of the Rp500.000.
Why You Need an Invoice with Value-Added Tax
With an invoice template with a value-added tax, a business can ease its administrative management and keep track of orders and taxation. Besides that, any company or business in the European Union. And most of Asia is obligated to provide an invoice with a value-added tax on every purchase of products with value-added tax. So you don’t have a choice when it comes to invoicing with VAT if your business is in either EU or Asia.
What You Need To Include In Your Invoice Template with VAT
The value-added tax (VAT) invoice must show quite a lot of details. Because every country in every union does not have the same financial laws. The VAT invoice does not have precise information on how it should have written. But it does have requirements on VAT so that you can base your template on those requirements. To make a proper VAT invoice, you need to include details in the list below;
- Date of the VAT issued,
- A unique sequential number for each of your invoices,
- You business contact details,
- The customer’s contact details,
- A ‘reverse charge applies’ notation in case of a reverse charge,
- An ‘intra-community supply of goods’ in case of an intra-community procurement of goods,
- The amount and specifics about the products or services,
- The VAT exclusive unit price,
- The payment received net of VAT,
- Discount or price reduction if there are any,
- The breakdown by the rate of VAT, and
- The date on which goods or services delivered.
While it sounds and looks complicated at first, you would get accustomed to it once the invoice is complete. The invoice with value-added tax will surely help your business. It can help regulate orders and customers so you can focus on the customer’s satisfaction, which can make your business thrive further.