VAT Invoice Template

A VAT invoice is used when selling goods with an added VAT tax. For most countries outside the United States, a VAT tax is a percentage on the value of a product or service when it is transferred or purchased. Use this invoice when requesting payment for products or services that have an added vat tax.

Table of Contents

What is VAT (tax)?

A VAT (Value Added Tax) is an indirect tax on goods when they go through the chain of supply (taxing at all levels of distribution). Most consumers really feel it when shipping goods to themselves in a countries that charges a VAT tax. About 140 countries around the world impose this tax on consumers.

A VAT registered business can reduce the burden of a VAT tax by charging an output tax (on sales) and input tax (on expenses), all payed to the country’s government. VAT taxes are largely responsible for goods in some countries costing far higher than in others without a VAT tax.

VAT Example

In this example, it shows how a vat tax is applied to every stage of the supply chain from beginning to end. Starting with the producer and ending with the consumer. A 20% VAT tax is prevalent in many countries that charge a VAT, therefore this example will use this percentage.

  1. A producer in France growing grapes sells a batch for $10 + $2 (%20 of $10 dollars) to a manufacturer located in France for a total of $12 dollars.
  2. The manufacturer uses the purchased grapes and makes bottled wine. The manufacturer sells a bottle of wine for $20 + $4 (20% of $20 dollars) to a distributor for a total of $24 dollars.
  3. The distributor then loads the bottle of wine on a truck and delivers it to the retailer for $30 + $6 ($20 of $30 dollars) for a total of $36 dollars.
  4. The retailer then puts the bottle of wine on a shelf in their store and sells the bottle for $40 + $8 (20% of $40 dollars) for a total of $48 dollars to the the consumer.

VAT by Country

CountryVAT
Albania 20%
Algeria 14%-19%
Aruba 2%
Austria 20%
Belarus 20%
Belgium 12%-20%
Botswana 12%
Brazil 7%-18%
Bulgaria 20%
Chile 20%
Croatia 5%-25%
Curaçao 6%-9%
Cyprus 19%
Denmark 25%
Estonia 20%
Finland 24%
Germany 19%
Greece 24%
Hungary 27%
Iceland 24%
India 1%-15%
Indonesia 10%
Ireland 23%
Israel 17%
Italy 22%
Japan 8%
Kazakhstan 12%
Latvia 21%
Lebanon 11%
Lithuania 21%
Macedonia 18%
Madagascar 20%
Malta 18%
Morocco 20%
Netherlands 21%
Norway 25%
Poland 5%-23%
Portugal 23%
Puerto Rico 11.5%
Romania 19%
Russia 18%
Serbia 20%
Slovakia 20%
South Africa 15%
South Korea 10%
Spain 21%
Sweden 25%
Switzerland 8%
Thailand 7%
Tunisia 19%
Turkey 18%
United Arab Emirates 5%
Ukraine 20%
United Kingdom (UK) 20%
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