> ## Documentation Index
> Fetch the complete documentation index at: https://docs.payreque.st/llms.txt
> Use this file to discover all available pages before exploring further.
# Tax Configuration for Invoices
> Configure VAT/BTW rates, tax display, and exemptions on your invoices
# Tax Configuration for Invoices
PayRequest automatically calculates and displays taxes on your invoices based on your business settings, product configurations, and customer tax status. This guide explains how tax appears on invoices and how to configure it.
## How Invoice Tax Works
When you create an invoice, PayRequest:
1. **Checks the customer's tax status** - Is the customer tax exempt?
2. **Applies product tax rates** - Each line item uses its product's configured tax rate
3. **Calculates tax amounts** - Based on tax-included or tax-excluded pricing
4. **Generates the invoice** - With full tax breakdown for compliance
Tax settings are determined hierarchically: Customer exemption > Product tax rate > Business default rate
## Tax on Invoice Line Items
Each invoice item shows:
| Field | Description |
| --------------- | ---------------------------------- |
| **Description** | Product/service name |
| **Quantity** | Number of units |
| **Unit Price** | Price per unit |
| **Tax Rate** | VAT/BTW percentage |
| **Tax Amount** | Calculated tax for this line |
| **Total** | Line total including/excluding tax |
### Example Invoice Breakdown
**Standard Customer (21% BTW):**
```
┌──────────────────────────────────────────────────────┐
│ Invoice #2025-0042 │
│ Customer: Acme B.V. │
├──────────────────────────────────────────────────────┤
│ Item Qty Price Tax Total │
├──────────────────────────────────────────────────────┤
│ Web Hosting 1 €50.00 21% €60.50 │
│ SSL Certificate 1 €25.00 21% €30.25 │
│ Support Hours 3 €75.00 21% €90.75 │
├──────────────────────────────────────────────────────┤
│ Subtotal (excl. BTW) €150.00 │
│ BTW 21% €31.50 │
│ Total €181.50 │
└──────────────────────────────────────────────────────┘
```
**Tax-Exempt Customer (BTW Verlegd):**
```
┌──────────────────────────────────────────────────────┐
│ Invoice #2025-0043 │
│ Customer: Euro Partners GmbH │
│ VAT: DE123456789 │
│ BTW VERLEGD │
├──────────────────────────────────────────────────────┤
│ Item Qty Price Tax Total │
├──────────────────────────────────────────────────────┤
│ Consulting 10 €100.00 0% €1,000.00 │
├──────────────────────────────────────────────────────┤
│ Subtotal €1,000.00 │
│ BTW (Verlegd) €0.00 │
│ Total €1,000.00 │
└──────────────────────────────────────────────────────┘
```
## Configuring Tax Rates
### Business Default Tax Rate
Set your default tax rate in **Settings > Tax & Currency**:
Go to **Settings** in your dashboard sidebar.
Click on the **Tax & Currency** tab.
Enter your standard tax rate (e.g., **21** for 21% Dutch BTW).
Click **Save** to apply the new default rate.
This default rate is used when:
* Creating new products (as their initial tax rate)
* Adding manual invoice items without a product reference
### Per-Product Tax Rates
Each product can have its own tax rate that overrides the default:
1. Go to **Products > \[Select Product] > Edit**
2. Find the **Tax Settings** section
3. Set the **Tax Rate** for this product
4. Toggle **Tax Included** if the price includes tax
**21% Standard Rate (Algemeen tarief)**
* Most goods and services
* Software licenses
* Consulting services
* Digital products
**9% Reduced Rate (Verlaagd tarief)**
* Books and e-books
* Food products
* Medications
* Hotel accommodations
* Cultural events
**0% Zero Rate (Nultarief)**
* Exports outside EU
* Intra-EU B2B supplies
* Certain medical services
## Tax Included vs Excluded
### Tax Included (Recommended for B2C)
When **Tax Included** is enabled on a product:
* The price you set is what customers see
* Tax is calculated backwards: `Tax = Price - (Price / (1 + Rate/100))`
* Better for consumer-facing pricing
**Example:**
* Price set: €121.00
* Tax rate: 21%
* Tax calculation: €121 - (€121 / 1.21) = €21.00
* Net amount: €100.00
### Tax Excluded (Common for B2B)
When **Tax Included** is disabled:
* The price you set is the net price
* Tax is added on top: `Tax = Price × (Rate/100)`
* Common for wholesale/B2B pricing
**Example:**
* Price set: €100.00
* Tax rate: 21%
* Tax calculation: €100 × 0.21 = €21.00
* Total: €121.00
## Creating Invoices with Tax
### Manual Invoice Items
When adding items manually to an invoice:
1. Enter the item description
2. Set quantity and unit price
3. Select the tax rate from dropdown
4. Toggle tax included if needed
PayRequest calculates the totals automatically.
### Product-Based Invoice Items
When adding a product to an invoice:
1. Select the product from the dropdown
2. The product's tax settings are applied automatically
3. Tax rate and inclusion settings come from the product
4. Adjust quantity as needed
### Handling Mixed Tax Rates
An invoice can contain items with different tax rates. PayRequest:
* Calculates tax per line item
* Shows a tax breakdown by rate in the invoice
* Totals all amounts correctly
**Example with Mixed Rates:**
```
┌─────────────────────────────────────────────────┐
│ Tax Breakdown: │
├─────────────────────────────────────────────────┤
│ 21% BTW over €200.00 €42.00 │
│ 9% BTW over €50.00 €4.50 │
│ 0% BTW over €25.00 €0.00 │
├─────────────────────────────────────────────────┤
│ Total BTW €46.50 │
└─────────────────────────────────────────────────┘
```
## Customer Tax Exemption
When a customer is marked as **Tax Exempt**:
### Automatic Behavior
* All invoice items are set to **0% tax**
* Invoice displays **"BTW VERLEGD"** indicator
* Tax totals show €0.00
* Customer is not charged any VAT
### Manual Override
Even for tax-exempt customers, you can manually adjust tax rates on specific invoice items if needed (though this is rarely required).
Be careful when manually overriding tax for exempt customers. This should only be done in special circumstances with proper documentation.
## Invoice PDF Tax Display
Your invoice PDFs include:
### Header/Footer
* Your business VAT number
* Customer's VAT number (if applicable)
* "BTW Verlegd" notice for reverse charge
### Line Items
* Each item shows its tax rate
* Tax amounts calculated per line
### Summary Section
* Subtotal (excluding tax)
* Tax breakdown by rate
* Total amount
* Payment instructions
### Legal Requirements
For EU VAT compliance, your invoices should show:
* Business name and address
* VAT/BTW registration number
* KvK number (Dutch companies)
* Customer name and address
* VAT number (for B2B reverse charge)
* Country
* Unique invoice number
* Invoice date
* Payment due date
* Currency
* Tax rate per line item
* Tax amounts
* Total tax
* Reverse charge notice if applicable
## Editing Invoice Tax
### Before Invoice is Sent
You can freely edit:
* Tax rates on any line item
* Tax included setting
* Add or remove items
### After Invoice is Sent
Editing sent invoices affects your accounting records. If significant changes are needed, consider issuing a credit note instead.
Minor corrections are allowed, but changing tax rates after sending may require:
* Notifying the customer
* Updating your accounting records
* Potentially issuing a corrected invoice
## Tax in Invoice Templates
Customize how tax appears in your invoice templates:
### Available Template Variables
| Variable | Description |
| --------------------- | -------------------------------- |
| `{tax_subtotal}` | Total before tax |
| `{tax_amount}` | Total tax amount |
| `{tax_rate}` | Applied tax rate (%) |
| `{invoice_total}` | Grand total including tax |
| `{tax_exempt_notice}` | "BTW Verlegd" text if applicable |
### Customization Options
In **Settings > Invoice Settings**, you can:
* Add custom footer text for tax notices
* Include payment terms
* Add reverse charge statements
* Customize the tax breakdown display
## Subscription Invoice Tax
For recurring subscription invoices:
### Automatic Tax Application
* Tax is calculated based on the subscription product's settings
* Customer exemption status is checked each billing cycle
* Tax rates can be updated and will apply to future invoices
### Subscription Amount Changes
If you change a subscription's tax settings:
* Past invoices remain unchanged
* Future invoices use the new settings
* Proration calculations include tax
## Common Tax Scenarios
**Settings:**
* Customer: Dutch individual, not tax exempt
* Product: Standard rate (21%)
**Result:** Invoice shows full 21% BTW, customer pays total including tax.
**Settings:**
* Customer: Dutch business, not tax exempt
* Product: Standard rate (21%)
**Result:** Same as B2C - 21% BTW charged. Customer reclaims on their VAT return.
**Settings:**
* Customer: German business, marked tax exempt
* Customer VAT number stored: DE123456789
**Result:** Invoice shows 0% VAT, "BTW Verlegd" notice, customer accounts for VAT in Germany.
**Settings:**
* Customer: US company, marked tax exempt
* Delivery: Outside EU
**Result:** Invoice shows 0% VAT, marked as export sale.
**Settings:**
* Line 1: Software (21%)
* Line 2: Training manual/book (9%)
**Result:** Tax breakdown shows amounts per rate, totals calculated correctly.
## Troubleshooting
**Check:**
1. Is your business registered for VAT in Settings?
2. Does the product have a tax rate set?
3. Is the customer marked as tax exempt?
If VAT registration is disabled, no tax will be applied.
**Possible causes:**
1. Product has a different rate than expected
2. Invoice item was manually adjusted
3. Business default rate changed after invoice was created
**Solution:** Edit the invoice item and select the correct tax rate.
**Check:**
1. Was the customer marked exempt before the invoice was created?
2. Was the invoice created from an older order?
**Solution:** Edit the invoice and set tax rates to 0%, or recreate the invoice.
This usually happens with tax-included pricing. The calculation extracts tax from the total, which can result in rounding differences.
**Example:** €10.00 at 21% = €8.26 net + €1.74 tax (rounds correctly)
PayRequest handles rounding to 2 decimal places.
## Tax Reporting
PayRequest provides tax data for your bookkeeping:
### Available Reports
* **Transaction Reports**: Show tax amounts per transaction
* **Invoice Export**: CSV export with tax breakdown
* **Revenue Tracking**: Separates net revenue from tax collected
### Bookkeeping Integration
Export your invoice data including:
* Invoice number and date
* Net amounts
* Tax amounts by rate
* Gross totals
* Customer information
This data integrates with common Dutch bookkeeping software.
## Related Documentation
Complete guide to tax settings in PayRequest
Managing customer tax exemption status
Configure product pricing and tax settings
Customize your invoice appearance
***
This documentation explains PayRequest's tax features. For advice on which tax rates to apply or how to handle specific tax situations, consult with a qualified tax professional familiar with Dutch and EU VAT regulations.