Definition
A tax invoice is an invoice that meets the legal requirements for the buyer to claim a tax credit, typically under a VAT or GST system. It must show the seller's tax registration number, the tax rate and amount for each line or the total, and other fields specified by the local tax authority.
Tax invoice in practice
In countries with VAT or GST, such as the UK, EU member states, Australia, India, and Canada, the term is formal. In the United States, where sales tax applies, invoices simply show the tax charged and the phrase "tax invoice" is rarely used.
If you are registered for VAT or GST, nearly every invoice you issue to a business must be a valid tax invoice, so build the required fields into your template.
Frequently Asked Questions
What must a tax invoice include?
Requirements vary, but commonly: the words "Tax Invoice", your business name and tax registration number, the date, a unique number, the buyer's details, a description of the goods or services, the tax rate and amount, and the total including tax.