Upon creating an invoice, credit note, bill or 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, e.g. children’s car seats and home energy
- Zero rate 0%: Zero-rated goods and services, e.g. most food and children’s clothes
Users can define new taxes, by providing their rates and a name/description.
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 6 decimals to enable users from countries that need as much.
Below the title field you will notice that there is a “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, provided that the “VAT” column is selected at the “Item” options table.
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 archive them. To put it simply, when a tax has been disabled, it cannot be used in new invoices 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. This can help with avoiding errors, since the old tax is no longer active.