ProZ Invoicing: am I missing something?
Thread poster: Olly Pekelharing

Olly Pekelharing  Identity Verified
Netherlands
Local time: 14:19
Member (2009)
Dutch to English
Mar 28, 2012

I use ProZ invoicing and I'm trying to calculate the VAT to pay this quarter. The invoices in this quarter (invoices with invoice date between start Jan and end Mar) total 13550.83, but the taxable amount is only 10958.82. Only one 25 euro invoice was not subject to 19% VAT (NL). That means the total amount of the invoices should amount to 13066 (10958.82 + 19% + 25), according to my calculations. What am I missing?

Thanks,

Olly


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Cristina C.  Identity Verified
Romania
Local time: 15:19
Member
English to Romanian
+ ...
taxable amount Mar 28, 2012

Here's what I think you do wrong.
You compute the taxable amount by subtracting 19% of the total amount from the total amount (of 13550.83), and this is exactly where your mistake lies: VAT isn't 19% of the total amount, but 19% of the taxable amount.
The amounts of VAT that you first subtract, then add back to what you think is the taxable amount, are different.

Edited to add formulae:
taxable amount = total amount / 1,19 (13525 / 1,19 = 11365 - this is the taxable amount in your case)
total amount = taxable amount X 1,19
VAT = taxable amount X 0,19

HTH

[Edited at 2012-03-28 18:07 GMT]


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Olly Pekelharing  Identity Verified
Netherlands
Local time: 14:19
Member (2009)
Dutch to English
TOPIC STARTER
Still doesn't compute Mar 29, 2012

Thanks,


Here's the figures for Q1 in ProZ invoicing:

total amount: 13.652,10

taxable amount: 11.043,92

tax amount: 2.098,36

taxable amount should be total amount / 1,19 (13.627,10 (-25 non-taxable invoice)/ 1,19 = 11451.34).


I'm missing 407.42 somewhere. Aren't I?

Regards,


Olly


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Cristina C.  Identity Verified
Romania
Local time: 15:19
Member
English to Romanian
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the taxable amount (once more) Mar 29, 2012

Hi, Olly.

I see the figures have changed but still the taxable amount is about 81% of the total amount, meaning that an amount equivalent to 19% was subtracted from the total amount.
The taxable amount should be about 84% of the total amount.
Have you checked your tax settings in the invoicing tool? Make sure VAT applies to item amount and not to item amount + tax.
Nothing else comes to my mind


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Olly Pekelharing  Identity Verified
Netherlands
Local time: 14:19
Member (2009)
Dutch to English
TOPIC STARTER
Thanks! Mar 29, 2012

Why should the taxable amount be about 84%?

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Erik Freitag  Identity Verified
Germany
Local time: 14:19
Member (2006)
Dutch to German
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Maths Mar 29, 2012

Olly Pekelharing wrote:

Why should the taxable amount be about 84%?


That's the miracle of maths: 1/1.19 ~ 0.84.


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Olly Pekelharing  Identity Verified
Netherlands
Local time: 14:19
Member (2009)
Dutch to English
TOPIC STARTER
Maybe I need an accountant after all.. Mar 29, 2012



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Cristina C.  Identity Verified
Romania
Local time: 15:19
Member
English to Romanian
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arithmetics Mar 29, 2012

Olly Pekelharing wrote:

Why should the taxable amount be about 84%?


VAT (19% of the taxable amount) will be only 16% of the larger, total amount. The taxable amount makes up the balance to 100%, hence 84%.

More precisely: it's 84,033613445378151260504201680672%


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Olly Pekelharing  Identity Verified
Netherlands
Local time: 14:19
Member (2009)
Dutch to English
TOPIC STARTER
Thanks for your patience Mar 29, 2012

I was always crap at maths. Anyway, this still means the figures in ProZ as I gave here don't add up, right? The taxable amount plus the tax amount should together add up to the total amount (of all invoices to which tax was applied). Right?? As on the invoice, the subtotal plus VAT = the total.

[Edited at 2012-03-29 15:29 GMT]


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Cristina C.  Identity Verified
Romania
Local time: 15:19
Member
English to Romanian
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total amount Mar 29, 2012

Olly Pekelharing wrote:

The taxable amount plus the tax amount should together add up to the total amount (of all invoices to which tax was applied). Right??


Right. Absolutely.


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