Proper tax configuration is essential for creating compliant invoices. This guide covers how to set up various tax types in Invoixca and best practices for different jurisdictions.
Setting Your Tax Rate
In the invoice builder's Finalize step, enter your applicable tax rate as a percentage. Invoixca calculates the tax amount automatically: Tax Amount = Subtotal × (Tax Rate / 100). The calculated tax, rate, and total are displayed on the PDF invoice.
VAT (Value Added Tax)
If your business is VAT-registered, include your VAT registration number in your business details. Enter the applicable VAT rate (standard rates vary: UK 20%, Germany 19%, France 20%, etc.) in the tax field. Your invoice will display the VAT amount as a separate line in the financial summary.
For reverse charge VAT (common in B2B cross-border EU transactions), set the tax rate to 0% and add a note: "Reverse charge: VAT to be accounted for by the recipient under Article 196, Council Directive 2006/112/EC."
GST (Goods and Services Tax)
For GST-registered businesses (India, Australia, New Zealand, Canada, Singapore), enter your GST registration number in the business details and set the applicable GST rate. Standard GST rates include: Australia 10%, New Zealand 15%, India 18% (standard), Canada 5% (federal), Singapore 9%.
Sales Tax (US)
US sales tax varies by state, county, and city. Enter your combined sales tax rate in the tax field. Note that some services may be exempt from sales tax depending on the state — consult your tax advisor for your specific situation.
Withholding Tax
If your client is required to withhold tax from payment, you can reflect this on the invoice by either adding a negative line item labeled "Withholding Tax" or using the discount field to show the deduction. Include a note specifying the withholding tax provision and rate.
Tax-Exempt Invoices
For tax-exempt transactions, set the tax rate to 0%. Add a note explaining the exemption reason, such as the relevant legislation section, export exemption, or charity status. This creates a clear audit trail for tax compliance.
Best Practices
Always display your tax registration number on invoices where required by law. Keep your tax rates updated when regulations change. Maintain records of all invoices for the retention period required by your jurisdiction (typically 5-7 years). Use the Financial Dashboard to generate tax period summaries for your accountant.