Using Taxes

VAT tax example

A common example of a VAT tax would be the VAT 20% of the United Kingdom. In this case, you should save this VAT before adding an invoice, following the guide.

When invoicing, while you add an item entry subject to this VAT, you click on the relevant “Taxes” button in order to apply the VAT.

The VAT will be implied on the total net amount of the product, as indicated in the screenshot below:

Withholding tax examples

Variable amount

There are cases in which the amount or percentage of the withholding tax is unknown. In this case, the user adds a variable withholding tax, as shown in the image below:

If this tax is selected, the user defines the amount of the withholding tax, every time that he adds an invoice.

Percent Value

The most common example of a withholding tax is a percent value tax that alters the payable amount of an invoice.

If the tax has been already saved in the tax menu, it can be applied to the invoice, by selecting it from the relevant field.

The withholding tax will be deducted from the total amount of the invoice, as indicated in the screenshot:

Fixed Value

In some cases, invoices include withholding taxes that are affecting the amount payable, not as a percentage, but as a fixed amount.

As mentioned before in this guide, Elorus users can create a fixed amount of withholding tax.

In the screenshot below, you can see how a fixed amount of a withholding tax impacts an invoice.

Applied on document lines

There are cases where withholding taxes are applied on a specific item entry or more.

After selecting this option, when saving the tax, a user can select it when invoicing, from the “Taxes” button of each entry.
In the screenshot below, an example of these withholding taxes is shown:

Usage for informational purposes

One last example of a withholding tax is when it is used only for informational purposes and does not alter the amount payable.

Therefore, when a user has already saved this withholding tax and checked this option, this tax can be applied on the invoice total or on a per-line basis.

In the screenshots below, you can find relevant examples:

Simple tax examples

Simple tax with a percent value

Simple tax subjected to VAT

There are cases when invoicing, where a VAT is included on top of a simple tax. Please note that only simple percent taxes are subject to VAT.

As a user has already saved such a simple tax, he could imply the simple tax in each item entry and then insert a VAT tax.

In the next screenshot, such an example is demonstrated:

Simple tax not subject to VAT

When a simple tax is not subject to VAT, there is an association between the tax and the VAT applied on the invoice.

The calculation of the total amount in such cases is projected below:

Simple tax as a fixed amount

Simple tax that depends on the quantity of the product

In these cases, where such an option has been selected when saving the simple tax, the total tax rate is applied on the fixed amount of the product multiplied by the invoice line's quantity.

Such an example is projected in the next screenshots:

Simple tax that does not depend on the quantity of the product

In these cases, the simple tax is not affected by the adjustment of the quantity of a product.
Therefore, the total amount of the invoice is calculated, as it is projected in the screenshot below:

Use of taxes when recording expenses

Any taxes included in entity’s liability bill are included in the yearly tax return. Therefore, accumulating your expense taxes is very important for the calculation of expected tax return.

Elorus users can utilize “Bills” and “Expenses” menu in order to archive their expenses and the taxes associated with them, enhancing a better picture of their tax liabilities. Moreover, they will calculate easier the tax return from your purchases.

For example, you can add a bill, using a saved tax, as it is indicated in the screenshot below:

The added tax amount of $2 is a tax return that will be deducted from your tax liabilities.
You can gain a better picture of your tax liabilities from the Tax reports presented at next.

Tax reports

Using tax reports, an Elorus user can find out the taxes included in sales and purchases for a given period of time.
Tax reports present the VAT, retention or other taxes included in sales and purchases documents, registered in the system. Those are calculated and presented in the columns below (per tax):

In the example below, the two types of information that appear are the "tax" and "taxable" amounts, from the two invoices issued in our examples before, in the selected period of time.

Elorus calculates the tax liability of the VAT 20% for this time period.

Any user can adjust the report view, using “Period”, “Filter” and “More Options” buttons respectively.

Default taxes

per contact

When adding a contact, any taxes specified in the form will be automatically applied onto new documents when invoicing this contact.

per product/service

When adding a product/service, any taxes specified in the form will be automatically assigned to the item line. By clicking on the arrow, you can choose from a selection of already existing rates or you can create a new one.