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Learn how QuickBooks calculates VAT

by Intuit• Updated 1 week ago

Take the guesswork out of collecting VAT. If you charge VAT for your products or services, you don't have to worry about calculating each tax rate yourself. QuickBooks can do all that for you. Here's how it works.

How the app calculates the correct VAT rate on each sale

We calculate the total VAT rate for each sale based on the following:

  • Your customer's VAT status
  • Where you sell and where you ship
  • What you sell

Some customers, such as churches, schools, and non-profit organisations, may be exempt from VAT.

You need to map your items to their proper VAT categories, and make sure your customer's address is correct on each transaction.

You don't have to keep track of all the local rates you need to charge. The app does all that based on the location of sale or the "Ship to" or "Shipping to" address you add in an invoice or receipt.

Note: VAT is charged based on where the sale happens or where goods are delivered. QuickBooks knows the VAT rules, wherever you run your business.

You can assign VAT categories to anything you sell. This lets the app know how much VAT you need to charge based on what exactly you're selling.

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