Create sales invoice with tax-inclusive amounts

If you charge tax, by default unit prices on sales invoices are treated as tax exclusive. You can make unit prices tax-inclusive when creating or editing invoices.

Tax exclusive means, when line items on the invoice are subject to tax, the tax will be added to the tax-exclusive total.

For example, let’s say we charge a customer 1,000 with 10% tax.

Since the amount of 1,000 is tax exclusive, when you create the invoice, 10% tax will be added to the 1,000, increasing the total to 1,100.

Many businesses prefer to show tax-inclusive prices on invoices. For example, you sell a widget for 999 which should be inclusive of tax. In order to do that, make sure Amounts are tax inclusive is checked.

Then enter unit price 999.

When viewing the invoice, you will notice the tax of 10% wasn’t added to the amount of 999. The balance due is 999 and the invoice shows the tax amount.

@lubos Kindly note that our VAT rate in Kenya is 16% and manager is not calculating correctly, we have to add upto 19% for it to calculate 16%…this is the desktop version.

Is the 16% an exclusive or inclusive rate - as 19% added on is the inverse of 16% subtracted off

Tax exclusive : 100 + (100 * 19%) = 100 + 19 = 119
Tax inclusive : 119 - (119 * 16%) = 119 - 19 = 100

Manager doesn’t appear to have any rate for Kenya, so did you add a custom rate

Yes it was a custom VAT rate but the tax generated isn’t in order, is there something am missing?

Are you entering your values as tax exclusive or inclusive. Check out the following examples:

A 100 sales or purchase invoice excluding tax would look like this

A 100 sales or purchase invoice including tax would look like this
(with the tax inclusive box ticked

Calculation - 86.21 * 16% = 13.79
How do these examples compare to your own transactions?

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Thanks for the response. I understand what you mean. If I tick then put the tax again it double taxes. Let me check with my client then get back to you.