Upon creating a document or an estimate and for every object charged on it you can determine VAT rates (see VAT rates examples below):
- Standard 20%: Most goods and services
- Reduced rate 5%: Some goods and services, eg children’s car seats and home energy
- Zero rate 0%: Zero-rated goods and services, eg most food and children’s clothes
Apart from the fact that every user can alter those taxes, they can define new ones as well, by providing their rates.
From the main menu select: Settings -> Taxes -> Add
There, you need to type the title for the tax, select the operand (-/+) and the percentage of the new tax, as shown in the picture below:
The operand field essentially suggests either a tax or a deduction.
Operand: + (plus)
Type: Select VAT
After saving, the new tax will be available upon issuing a new document, or while editing a draft.
The VAT's percentage can have up to 4 decimals to enable users from countries, like Canada, that need them.
Below the title field you will notice that there is the "Translations" field. In case you want to issue documents in a foreign language, you can edit the tax and save its translation.
To create a document with VAT exemption, you simply do not select a tax for your products when creating it. Once the document has been saved, the system will display a "VAT Exempt" indication in the VAT column.
For data integrity purposes, if a certain tax has already been used for at least one commercial document, Elorus will not allow editing its rate. Furthermore, you cannot delete taxes from the system; you can only activate or deactivate them. A tax, if deactivated, cannot be used in new documents but remains unchanged in already issued ones.
Suppose that, based on legislation, a VAT rate is decreased from 20% to 17%. The procedure you have to follow is:
Visit the taxes page and deactivate the 20% VAT rate. Next, create a new tax, which will also be a VAT and set its rate at 17%. Therefore, by the end of this process, your new documents will have a 17% VAT and avoid errors, since the old tax is no longer active.