Concept Definition
What is the net amount on an invoice?
The net amount is the invoice value before VAT is added. It is the total of all line item net amounts minus any invoice-level discounts and plus any invoice-level charges. VAT is calculated on the net amount. In UBL, TaxExclusiveAmount carries the net invoice total.
What is the relationship between net, VAT, and gross amounts?
The three core monetary totals on a VAT invoice:
- Net amount (tax-exclusive): Sum of all taxable line amounts after discounts.
- VAT amount: Net amount multiplied by applicable VAT rate(s).
- Gross amount (tax-inclusive): Net amount plus VAT amount. The amount the buyer owes.
Frequently Asked Questions
- Which amount is used to calculate VAT?
- VAT is calculated on the net (tax-exclusive) amount. For example, a net amount of EUR 1,000 with 20% VAT produces a VAT amount of EUR 200 and a gross amount of EUR 1,200.
- Is net amount the same as taxable amount?
- In most cases yes. The taxable amount is the net amount to which the VAT rate is applied. For mixed-rate invoices, there is a separate taxable amount per tax category, and the total net amount is the sum of all taxable amounts.