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How is VAT calculated on invoices in billwerk?

There are basically two different methods for calculating the VAT on an invoice. A distinction is made between the horizontal method and the vertical method. Both calculations meet the requirements for invoices, § 14 of the VAT Act (Umsatzsteuergesetz), as no specific calculation method is prescribed. Both methods are accepted by the tax authorities.

billwerk uses the horizontal method to calculate the VAT. With the horizontal method, VAT is first calculated for each invoice line from the gross unit price or from the net unit price. The value is rounded symmetrically to two decimal places. Then the VAT is multiplied by the quantity of the invoice line. Further information on rounding amounts can be found here.

To calculate the total VAT for the invoice, the VAT calculated and rounded for each invoice line is summed up.

Only this calculation method makes it possible to use several tax rates in one document, without a separate listing. This method is also the prerequisite for the split posting of the individual items to different financial accounts.

Since the VAT is calculated according to the horizontal method, individual invoice items can also be reversed without reversing the entire document. If you calculate the VAT using the vertical method, the invoiced and credited VAT may not match if you correct individual invoice items.

In general, if a customer complains about the differences resulting from the various calculations, he can post the difference to an account for other expenses/income or collect it on an asset account (clearing account) during the fiscal year and post the balance to profit or loss at the end of the year.