Learn how QuickBooks calculates VAT

Some customers, like charities or schools, may be exempt from VAT.

If your customer is VAT-exempt:

• Mark them as VAT-exempt in their customer profile.
• Make sure their billing and shipping address is correct.

Still seeing VAT on their invoice?

VAT rules can vary. In some cases, only certain items are exempt, or only partial relief applies. The app checks the item and customer address to apply the correct VAT treatment.

VAT can depend on where the sale happens or where goods are delivered.

• QuickBooks applies the right rate based on the location you enter on the invoice.
• You don’t need to track different rates—QuickBooks keeps them up to date.

Selling across borders?

If you sell outside your region or country, different VAT rules may apply. For example, sales to EU businesses may be zero-rated if they provide a valid VAT number. The app helps you apply the right VAT rate based on where your customer is and the type of sale.

Different products and services are taxed in different ways—some may be zero-rated or exempt.

To make sure VAT is calculated correctly:

• Assign the correct VAT category when you set up each product or service.
• The app uses this information to apply the correct rate.

To help the app calculate VAT correctly, make sure:

• Your customer’s VAT status and address are up to date
• You’ve added the correct VAT category to each product or service
• You’ve entered the right sale or shipping location on each transaction