In many countries, businesses registered for VAT (value added tax) or GST (goods and services tax) must issue a tax invoice — an invoice that includes specific details so the customer can reclaim the tax. This guide explains the basics. Tax rules change and vary widely, so always confirm the current requirements with your local tax authority or an accountant.

What is a tax invoice?

A tax invoice is a standard invoice that also shows the information your tax authority requires for VAT or GST. If you are not registered for VAT or GST, you usually issue a regular invoice without charging these taxes.

Details commonly required on a VAT or GST invoice

  • The words “Tax Invoice” (required in some countries)
  • Your business name, address and VAT or GST registration number
  • The customer's name and address (and their registration number for some business-to-business sales)
  • A unique, sequential invoice number and the invoice date
  • A description of each item with quantity and price
  • The tax rate applied and the tax amount
  • The total amount payable including tax

How VAT and GST are calculated

Most invoices calculate tax on the net (pre-tax) amount after any discount:

Tax = (subtotal − discount) × tax rate

See a full worked example in how to calculate invoice totals and how to calculate tax on an invoice.

How rules differ by country

  • United Kingdom and EU: VAT invoices must include the supplier's VAT number and the VAT amount; simplified invoices may be allowed for small sales.
  • UAE and Saudi Arabia: VAT tax invoices have specific required fields, and Saudi Arabia has e-invoicing requirements for many businesses.
  • India: GST invoices require the supplier's GSTIN and details that depend on whether the sale is within a state or between states.
  • Australia: a tax invoice is needed for GST-registered sales above a set amount, and it must show the seller's ABN.
  • Canada: GST/HST registrants show their registration number, with more detail required as the sale value increases.
  • United States: there is no VAT or GST; sales tax is set by states and local areas and applies to certain goods and services.
  • Pakistan: sales tax registered businesses issue sales tax invoices with their registration numbers.

Creating a VAT or GST invoice online

With KJ Invoice you can enter your VAT or GST rate and the tax is calculated automatically. Add your registration number to your business details and any other required wording in the notes, then download the invoice as a PDF. If your country requires government-connected e-invoicing, use an approved system for those invoices.