When creating an invoice, you can choose whether the amount to be invoiced includes VAT or whether you calculate VAT on top of your invoice amount for your work.
With certain exceptions, VAT must be paid on the invoice amount. Therefore, even when pricing the service, the share of value added tax should be taken into account, so that there is enough left over for your salary of the work.
You can use the income calculator to help with pricing.
The value added tax portion of the price must always be separated on the invoice. With the invoice form, you can state the unit price either including VAT or without VAT:
- If you enter a price without VAT on the form, the form automatically calculates the portion of VAT and the price including it and separates them on the invoice.
- If you directly state the price with VAT, the form automatically calculates the portion of VAT from the price you stated and separates the price without VAT and with VAT on the invoice.
Please note that when you agree on prices with the customer, the price should always be given to consumer customers including value added tax. For companies, on the other hand, the price is usually announced without VAT.
The portion of VAT can be calculated as follows:
Price (incl. VAT) x tax rate / ( 100 + tax rate)
E.g. graphic designer makes a 1000€ invoice in which 24% VAT is included. How many euros is the portion of VAT?
1000 € x 24 / (100 + 24)
=1000 € x 24 /124
=193,55 €
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