Many countries practice VAT which is a sales tax. VAT stands for ‘Value Added Tax’. It is a government tax imposed on the goods purchased. When a company conducts a transaction with another, it is obligated to include the VAT amount in its charges. Hence, a VAT invoice is prepared for the recipient to note the total amount of charges for the transaction, inclusive of VAT.
A VAT invoice records information about a transaction that can be used by the recipient to report its taxes.
A VAT Invoice template can look very much like an invoice template with the following information at the top:
* Seller’s Name & Address
* Buyer’s Name & Address
* Date of transaction
* Invoice Number
* Total Cost
* Cost without VAT
* Total VAT charges
* Payment Balance
The above are the basic information to be transmitted between the sender and recipient. As it is a document on taxes, care must be taken to ensure the right and accurate information to be listed on this VAT invoice document.
A VAT analysis can be calculated from the VAT invoice template by inputting the VAT percentage and the transaction cost. This makes it easier for the seller to determine the VAT amount. Sometimes, there may be a discount or rounding up of totals due to special conditions.
The company may submit the VAT invoices to the Tax Bureau for tax filing purposes.
Consider the attached sample template for your convenience.