How to write a VAT invoice?

If you are by chance doing business in UK with EU countries, you cannot escape giving a VAT invoice to your client. At first i didnt know how to write a vat invoice to my clients and had no idea how to do it. Before giving a vat invoice your company must have a VAT registration no and without which you cannot issue invoice to clients.

If you are a firm, you must quote EU VAT number in your invoice.

Remember that you have to calculate VAT from the Net amount and not from the Gross amount. If the net amount is €10, VAT is 15%,  and then gross total would be  Net + Net*VAT, which is €10 + 15/100 = €11.50. Take a look at the vat invoice below.

Also, be sure to include invoice no, date, vat%, with net and gross amount. If you are issuing invoice to a company registered in another country (within EU), be sure to ask the VAT no from them and mention it under the customer. This way, you can charge zero vat or eliminate vat, provided customer vat is quoted in invoice. If you are invoicing on personal name, vat must be charged. There are several invoicing softwares available, that makes life easier for you.

Carefully observe the invoice given above.

One interesting scenario rises! What if i want to invoice for gross amount of €10, inclusive of VAT. How to calculate?

Like i said before, always VAT had to be computed from the Net amount.

Gross = Net + VAT

We know that Gross is (€10) and VAT = Net*12%

10 = Net + Net * 0.12
10 = Net (1+0.12)
10 = Net * 1.12
Net = 10/1.12 = 8.928
VAT Amt: 1.072

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