Financial Imperative: full analysis of invoice amounts and taxes
In daily financial operations, the precise distinction between tax-in and non-tax-free prices is the basis for accounting and tax disclosure. The complexity of tax calculation is determined by differences in tax rates between different industries and by the different nature of the general and voting lists.
1. Core conversion formula
Two formulas are available to calculate the scene for 90% of the invoices:
- Known tax price without tax price: No tax amount = total tax amount ÷ (1 + rate)
- Known to be free of tax charges.: tax = no tax = tax rate
- Total amount certified: Total with tax = No tax + tax
Overview of VAT rates in 2026
Under the current tax policy, VAT is divided into the following categories:
- 13%: For most manufacturing, wholesale and retail trade.
- 9%: For transport, construction, real estate development, basic telecommunications, etc.
- 6%: For most services such as finance, value added telecommunications, tourism, legal advice, etc.
- 3% / 1%: For small taxpayers, 1% of which is a phased preferential rate introduced in recent years.
3. General VAT invoices vs Specialized invoices
While the tax calculation methods are fully consistent, there are significant differences in accounting treatment:
- Proofs (value added tax-specific invoices)Lower-stream enterprises can deduct their tax amounts as “inward taxes” and reduce their own tax burden.
- Universal votes (value added tax (VAT) invoices): usually only as a record-keeping document and not offset by the deduction of taxes (except for a specific crediting policy).
The concept of “extra-price tax” in financial accounting
VAT is an extra-value tax. This means that in commercial negotiations, the “price” usually implied that it was not tax-free, if not specifically stated. In signing the contract, it is important to specify whether it is “including or not” and to specify the rate of taxation so as to avoid the emergence of later reconciliation disputes.