A tax invoice is an invoice containing the information required to support the stated indirect-tax treatment of a transaction. Required fields, timing, format and terminology vary by jurisdiction. A document called a tax invoice is not necessarily compliant if it lacks the applicable legal information.
What information may be required?
- Supplier and customer legal names and tax identifiers
- Unique invoice number and issue date
- Description, quantity and date of supply
- Taxable amount by rate or category
- Tax rate, tax amount and gross total
- Currency and any required exemption or reverse-charge statement
How is invoice tax calculated?
A basic illustrative method is tax amount = taxable amount × tax rate, with the gross amount equal to taxable amount plus tax.
Illustrative tax invoice calculation
| Step | Arithmetic | Result |
|---|---|---|
| Taxable amount | Illustrative net supply | $10,000 |
| Illustrative rate | Example rate only | 10% |
| Tax amount | $10,000 × 10% | $1,000 |
| Gross invoice total | $10,000 + $1,000 | $11,000 |
The figures are illustrative and are not a statement of the rate or treatment in any jurisdiction. Discounts, exemptions, multiple rates, inclusive pricing and currency rules can change the calculation.
Tax invoice vs. commercial invoice
A commercial invoice supports a sale and, in cross-border goods trade, customs and shipping records. A tax invoice specifically supports an indirect-tax treatment. One document may serve both purposes if it meets every applicable requirement.
