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Edit, deactivate, or update VAT rates in QuickBooks

by Intuit•10• Updated 3 weeks ago

Learn how to manage VAT rates and tax agency settings in QuickBooks Online—whether you’re on the web or using the QuickBooks mobile app.

Before you begin

When you edit a VAT rate, the changes apply only to new transactions going forward. Here’s what else to expect:

  • Past transactions will not update automatically—you’ll need to edit them manually.
  • If you enter a new transaction with a backdated date, it will still use the new rate.
  • The earlier rate becomes inactive and can’t be reused.
  • Reports may show both the old and new rates for overlapping periods.
  • Recurring templates will use the new rate going forward—but you must update the template manually.

Add a new VAT rate

You can add a VAT rate using the QuickBooks web app or mobile app.

  1. Go to Taxes and select VAT (Take me there).
  2. Select the Edit VAT dropdown, then choose Edit rates.
  3. Select Add a new tax rate.
  4. Choose Single or Combined rate.
  5. Enter the Rate name, Agency, and Rate %.
  6. For combined rates, add details for each component.
  7. Set an Effective date (optional).
  8. Select Save.
  1. From the Menu ☰, go to Settings, then select Tax Rates.
    • If it’s your first time, select Add tax rate or Get started.
  2. Tap Add a new tax rate, then choose Single or Combined.
    • On iPad, select New Tax.
  3. Enter the tax details:
    • Single rate: Add the Rate name, Agency, and Rate.
    • Combined rate: Add the Combined Rate name, then enter details for each part.
  4. Tap Save.

Edit a VAT rate

You can change the name or rate of a custom VAT rate, but not QuickBooks default rates.

  1. Go to Taxes and select VAT (Take me there).
  2. Ensure the correct tax agency is selected.
  3. Select the Edit VAT dropdown, then choose Edit rates.
  4. In the rate table, find the VAT rate you want to update, then select Edit.
  5. Change the Rate name, Rate %, or Effective date if needed.
  6. Select Save.
  7. Use the On/Off toggle to activate or deactivate the rate.

Note: Default VAT rates created by QuickBooks can’t be edited.

Error tip: If you see this message—“To process this credit card transaction, please enter a credit card number (code: INDIRECTTAX-15811)”—the VAT rate is used in a recurring transaction with auto-charge.

To fix it:
1. Create a new VAT rate.
2. Update your recurring transactions to use the new rate.
3. Go to Sales Tax settings and deactivate the old rate.

iPhone and Android:

  1. From the Menu ☰, go to Settings, then Tax Rates.
  2. Select the rate you want to edit.
  3. Tap Edit ✎, update the name or rate, then tap Save.

iPad:
You can’t edit VAT rates on iPad. Use QuickBooks Online on the web.


Update a custom VAT rate

If you’ve created a custom VAT rate and need to make changes to it—such as adjusting the percentage or making it inactive—use the steps below. These changes will only apply to new transactions going forward.

To update a custom VAT rate:

  1. Go to Taxes, then select VAT or CIS, depending on the rate you need to change.
  2. Select Edit VAT or Edit CIS, as appropriate.
  3. From the dropdown, select Edit rates.
  4. Use the On/Off toggle to activate or deactivate the rate.

Note: To update the VAT rate on an existing transaction, open the transaction manually and change the rate.

  1. From the Menu ☰, go to Settings, then Tax Rates.
  2. Select the rate you want to update.
  3. Tap Edit ✎ to change the rate or tap to deactivate it.

Deactivate a VAT rate

QuickBooks Online doesn’t allow you to delete VAT rates, but you can make them inactive. This is useful for rates you no longer use, but keep in mind that inactive rates cannot be reactivated.

  1. Go to Taxes, then select VAT.
  2. Select Edit VAT, then choose Edit rates.
  3. Find the tax rate you want to deactivate and switch it from On to Off.

Important: Deactivated VAT rates can’t be reactivated. To use the rate again, you’ll need to create a new one.

To view deactivated rates:

  1. Select the gear icon above the Action column.
  2. Tick Include inactive.
  3. View the deactivated rates.

Change a VAT rate in a transaction

You can also add or edit a VAT rate directly from an invoice, estimate, or sales receipt.

  1. Open the transaction (invoice, estimate, etc.).
  2. Click on the VAT field.
  3. Select a different rate or create a new one.
  4. Save the transaction.
  1. From the Menu ☰, open the relevant estimate, invoice, or sales receipt.
  2. Tap Edit ✎.
  3. Tap the Tax field.
    • On iPad, tap Select Tax if no rate is listed.
  4. Choose an existing rate or tap +/Create a new Tax Rate.
  5. Tap Save.

Rename a tax agency

You can only rename custom tax agencies created by you. The new name will show in the Sales Tax Centre, but sales forms will still display the original name. If you want a different name to appear on forms, you’ll need to create a new agency.

  1. Go to Taxes, then select VAT (Take me there).
  2. Use the dropdown next to VAT to choose the custom agency.
  3. Select the Edit [agency name] dropdown, then choose Edit settings.
  4. Update the Tax agency name, then select Save.

Note: The updated name will show in the Sales Tax Centre, but sales forms will still display the original name. If you want a different name to appear on forms, create a new agency.

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