European Taxation (VAT)

Value-Added Tax (VAT) is a tax levied on goods and services sold within the European Union (EU). iMIS supports VAT, so you can tailor your organization’s taxation method for the EU member countries in which you have operations. Applicable taxes then will be calculated automatically based on a customer’s country.

Including and showing VAT

To charge VAT, you multiply the net price by the VAT rate (to calculate how much VAT to charge) and then add that amount to the net price to give the 'gross' (inclusive) price:

Net price = £100

+ VAT due at 20% = £20

= Gross price = £120

When is VAT included in the price? — Almost always. By law, the prices advertised in retail shops must include VAT, so no additional tax is charged at checkout. Products advertised in magazines, catalogs, websites, price lists, and other literature may be aimed at the public, businesses, or both. By law, if they are meant only for the public, then prices must include VAT. If they are meant for both public and business, then VAT-inclusive prices are usually given.

Exception: Prices quoted between organizations (companies) are often VAT exclusive, because VAT might be claimed back by a company and so should not affect the budget.

When is VAT shown on bills and receipts? — Most retail prices on bills and receipts include VAT, so it is not shown separately. However, some may list the VAT as a separate line, just to report how much tax is included in the price. Invoices from VAT-registered suppliers (like builders) must show a separate amount for VAT, as well as the VAT Registration Number of the business.

To specify whether  you want VAT-inclusive or VAT-exclusive pricing, you enable a setup option in AR/Cash. See Configuring VAT options in AR/Cash.

More:
Configuring iMIS for VAT
Setting up VAT for Events
Setting up VAT for Orders
Setting VAT tab data for a contact
Overriding VAT for a registrant (event attendee)
Overriding VAT on an order
Modifying reports and invoices for VAT
Validating VAT