VAT-inclusive price
In Arabic السعر شامل الضريبة
A VAT-inclusive price is a selling price that already contains value added tax, so the amount the customer pays equals the price shown.
In plain words
Shops and consumers think in prices they actually pay, so many distributors quote retail-facing customers VAT-inclusive prices. The books, though, need the net sale and the VAT apart, because only the net is your revenue.
To take the VAT out, divide by one plus the rate: at 15%, the net is the price divided by 1.15, and the VAT is the rest. Each line is worked out at its own rate, since zero-rated and standard-rated items can sit on one invoice.
The common mistake is taking 15% of the inclusive price as the VAT. That overstates the tax, understates the net sale, and the invoice no longer adds up.
- VAT-inclusive price
- SAR 23.00
- VAT rate
- 15%
- VAT inside: 23.00 × 15 ÷ 115
- SAR 3.00
- Wrong way: 15% of 23.00
- SAR 3.45
- Net price
- SAR 20.00
In Axon Suite
How Axon Suite handles it
In Axon Suite a price list can be marked VAT-inclusive. The VAT is taken out of each line at its own rate, and the document keeps its price terms from quote to order to invoice.
Feature
VAT-inclusive price lists
Mark a price list as VAT-inclusive and every line priced from it carries the VAT inside the price. Axon Suite takes the VAT out at each line’s own rate, and the document keeps its price terms from quote to order to invoice.
Open: VAT-inclusive price lists