VAT rates stored in the system
By default, you can choose from the VAT rates of the country in which your company is based.
For Austria, for example:
20 % General tax rate
13 % Reduced tax rate 2
10 % Reduced tax rate 1
5 % Reduced Tax Rate (COVID-19)
0 % Not taxable
0 % Tax free
Distinction between 0% VAT non-taxable and 0% tax-free (for Austria)
From a VAT perspective, there are various types of “no VAT”, whereby the end result for the respective business transaction is that no VAT is incurred or has to be paid to the tax office.
However, for further processing in accounting, it makes a difference whether no sales tax is to be paid for a business transaction because it is “not taxable” or because the business transaction has been exempted from sales tax and is therefore tax-free.
Non-taxable:
Non-taxable business transactions from a VAT perspective include, for example, a money transfer from the cash register to a bank account or a private withdrawal. The common feature of these non-taxable business transactions is that they are not included in the VAT returns for the tax office.
Tax free:
Tax-free business transactions, on the other hand, must be included in the sales tax return. In addition, it must be stated why these sales are tax-free. One example is intra-community deliveries, i.e. when your customer is a business in another EU country and you send your products there. However, some domestic sales are also exempt from sales tax, for example from non-profit organizations, from medical treatments as a doctor, dentist, psychotherapist, midwife, and also for certain real estate or rental sales.
The list of sales exempt from sales tax can be found in Section 6 of the VAT Act. Please check with your tax advisor which sales tax rate applies before adding your products to our system.
Creation of products
It is important that you select the correct sales tax rate when setting up a product for sale.
Cashbook
The sales tax rates stored in the system are also available for manual entries in cashbook.
For example, for entries in the categories “To Bank” or “From Bank”, i.e. for those transactions that do not trigger sales tax, select “0% Non-Taxable”.
Small business owner (may not applicable for your country)
If your tax advisor has informed you that you are classified as a small business owner from a VAT perspective, you can set this up as follows:
- Log in to the Admin Interface
- Go to Preferences
- You will be taken directly to the Company Data settings
- Go to Company Profile
- Scroll to the point Subject to VAT
- Select the small business regulation
Small businesses are exempt from sales tax. When creating a product, you will therefore only have the option of “0% small business”.
