Setting up reverse charge invoices

If you invoice business customers in other countries, you may need to issue reverse charge invoices. In the EU, for example, a reverse charge invoice usually shows your VAT number and your customer's, charges no VAT, and states that the customer accounts for the VAT.

Avaza can print both tax numbers in the invoice header and hide all tax amounts, so you don't have to type the numbers into your notes. Check with your accountant or tax adviser exactly what your invoices must say.

You'll set up:

• your own tax number and its label, in Invoice & Bill Settings;
• each customer's tax number and label, in their Financial Details;
• a reverse charge invoice template that shows both numbers and hides the tax;
• the reverse charge wording, in the template's notes.

Administrators and Finance Managers can do all of this. Portfolio Managers and Project Managers can also edit a customer's Financial Details.

1. Add your tax number

1. Go to Settings › Invoice & Bill Settings.

2. Enter your Company Default Tax Number, for example your VAT number.

3. In Company Default Tax Number Label, enter the label to print before it, such as VAT or USt-IdNr. Leave it blank to use "Tax Number".

4. Click Save.

If you typed your tax number into a Display Address before, on this page or in a template, remove it there. Otherwise it prints twice.

2. Add your customer's tax number

1. Go to Contacts, open the Companies tab and click the customer.

2. On the Details tab, click Edit under Financial Details.

3. Enter the customer's Tax Number. Optionally, enter a Tax Number Label that suits their country, such as VAT No or USt-IdNr. Leave the label blank to use the template's label, or "Tax Number".

4. Optionally, set Invoice Template to your reverse charge template (see step 3), so new invoices for this customer use it.

5. Click Save changes.

You can also enter the tax number and label when you add a new company. See adding your customer's tax number for more.

3. Set up a reverse charge template

Use a separate template, for example "Reverse Charge Invoice", so your other invoices don't change.

1. Go to Settings › Invoice & Bill Settings, scroll down to Invoice & Quote/Estimate Templates and click Add Template. Enter a Template Name and click Add Template. The new template opens.
   A new template doesn't copy your other templates' settings, so check its General tab too. To edit a template later, click its name in the list, or click Edit next to the Invoice Template name on any invoice.

   

2. Open the Layout tab. Under Show/Hide, switch on Show Company Tax Number and Show Customer Tax Number. Both are off by default.

3. Switch off Show Tax Column, so the lines don't show a tax column.

4. Set How are Tax Totals Displayed? to Don't display tax, so no tax rows appear in the totals.

5. Optionally, enter a Company Tax Number for this template only, such as a separate EU VAT registration. Leave it blank to use your Company Default Tax Number.

6. Optionally, change the labels for this template under Override Invoice Labels › Header: Company Tax Number for your number, and Customer Tax Number as the default for customers without their own label. A new template's heading reads "Tax Invoice". You can change it there too, in Invoice Header Title.

7. Open the General tab and add your reverse charge statement to Default Payment Instructions & Notes. For example: "Reverse charge: VAT to be accounted for by the recipient (Article 196, Council Directive 2006/112/EC)." Check the wording with your adviser.

8. Click Save.

The statement is copied into the Notes of each new invoice that uses the template. Invoices you've already created keep their notes.

4. Create the invoice and check it

1. Create the invoice as usual. If the customer's Invoice Template is your reverse charge template, it's already chosen, with its notes. Otherwise, choose the template under Invoice Template on the invoice. Avaza adds the template's notes, and asks before it replaces notes you've already written.

2. Set each line's Tax Rate to No Tax, or another 0% tax. Lines from Add Time take the tax of your default timesheet inventory item, and lines from Add Expense keep each expense's tax, so check those lines too.

3. Save the invoice, then click Web View or PDF to check it.

Your tax number is the last line of the From block, and your customer's is the last line of the To block. The tax column and tax totals are hidden. If a customer has no tax number saved, their line is left out. Estimates that use the template show the numbers too.

Hiding the tax only changes what's printed. On a Tax Exclusive invoice, the Total Amount still includes any tax left on a line, which is why every line needs a 0% tax.

How Avaza picks the number and label

Avaza reads the numbers and labels whenever an invoice is viewed or downloaded. A change also shows on invoices you've already sent with that template.

If something doesn't look right

• The numbers don't appear. Check that Show Company Tax Number and Show Customer Tax Number are on in the template this invoice uses.
• Tax still shows. Check that the template has Show Tax Column off and How are Tax Totals Displayed? set to Don't display tax, and that every line's Tax Rate is No Tax.
• A tax number appears twice. It's probably still typed into an address: the Display Address in Invoice & Bill Settings or the template, or the customer's address. Remove it there.
• Are the numbers in emailed invoices? Yes. Both the online invoice and the PDF show them. The PDF is attached when Include PDF version of the Invoice is ticked, as it is by default.
• Can customers in different countries have different labels? Yes. Set a Tax Number Label on each customer, for example "VAT No" for one and "USt-IdNr" for another.
• Is this the same as the tax identifiers for e-invoicing? No. Those are set up separately, and these settings don't change them. See getting started with e-invoicing.

Using the API

• GET /api/Invoice returns the tax number and label for the issuer (your company) and the recipient (your customer), worked out as they're printed. They're returned even when the Show switches are off.
• GET /api/InvoiceTemplate returns a template's Show switches, its Company Tax Number and its label overrides.
• /api/Company (GET, POST and PUT) includes the customer's TaxNumberLabel. When you import companies, use the Tax Number Label column.