Invoices
VAT and tax treatment
How numwisely decides whether an invoice charges VAT, and which legal note it prints.
Updated: 2026-10-07
Before you start
- Your country and VAT status set under Invoice settings → Business
- Clients with the correct country, and a VAT ID for EU business clients
Open related features
Set your VAT status first
Under Invoice settings → Business → VAT status, choose what your business is. This decides whether your invoices charge VAT at all.
- VAT-registered — invoices charge VAT where it applies.
- Small business (exempt) — invoices charge no VAT and print the small-business exemption note. In Finland this is the AVL 3 § rule (turnover at most €20,000 this year and last year); in Germany § 19 UStG (at most €25,000 last year and €100,000 this year).
- Not registered — invoices charge no VAT and say that you are not registered for VAT.
How the tax treatment is chosen
When you pick a client, numwisely chooses a tax treatment from your country and VAT status, the client’s country, whether the client is a business or a private person, their VAT ID and its VIES check, and what you sell (services, goods or digital). The Tax section of the editor shows the result and why it was chosen.
The treatment is saved on the draft. It changes only when you change the client or what you sell, and you are told when it does. If you know the automatic choice is wrong, use Change treatment; your choice is stored on that invoice.
- Domestic — VAT at your country’s rates. Also used for EU business clients without a valid VAT ID, private customers in the EU, and private customers outside the EU buying services.
- Reverse charge (EU B2B) — services to a VAT-registered business in another EU country. No VAT; the client accounts for it. Chosen automatically only when the client’s VAT ID is valid in VIES. Otherwise you confirm that the client is a VAT-registered business before finalizing.
- Intra-EU supply of goods — goods to a business in another EU country. No VAT, same VAT ID rule.
- Export outside the EU — goods to a client outside the EU. No VAT.
- Outside the EU, not taxable — business or digital services to a client outside the EU. No VAT.
- Small business, no VAT / Not VAT-registered — follows your VAT status.
Rates, lines and totals
Each line has its own VAT rate, chosen from your country’s rates (set the default under Numbering & defaults → VAT rate for new lines). Where a line is exempt or zero-rated you can pick that instead.
VAT is calculated per rate, and the invoice shows one VAT row per rate. Rounding happens once per rate, the way e-invoicing rules require, so the PDF and the e-invoice always show the same totals. When you invoice in a currency other than your own, the VAT is also shown in your national currency at the ECB rate of the issue date.
The legal tax note
When an invoice charges no VAT, a note explaining why is printed on it — in the invoice language, and citing your own country’s law (a German business cites the UStG, a Finnish business the AVL). You can edit the wording in the Tax section. If a single line has 0 % VAT on an otherwise normal invoice, add a note explaining the exemption that applies.
Common mistakes
- Charging VAT while not VAT-registered: set your VAT status to Small business or Not registered instead.
- Reverse charge without a checked VAT ID: validate the client’s VAT ID under Clients. If VIES can’t be reached, confirm the client is a VAT-registered business, or check again later.
- Wrong client country or customer type: the treatment follows them, so fix the client and re-pick it on the draft.
- Changing the treatment by hand without being sure: the automatic choice explains its reason — read it first.
Limits
Charging the VAT of the customer’s country through the EU One-Stop Shop (OSS) is not available yet. numwisely checks invoices against the invoice rules of your country, but it doesn’t replace advice from an accountant on your own VAT obligations.