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How to calculate VAT and issue VAT invoices

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Small business guides > Quick guide to VAT > How to calculate VAT and issue VAT invoices

How to calculate VAT and issue VAT invoices

If you’re a VAT-registered business you must add VAT to your prices. You also need to issue VAT invoices to customers so they know the amount of VAT being added to the bill and the total cost.

Let’s take a look at the maths and requirements of both.

How to add VAT to prices

There’s a very simple formula for each VAT rate.

How to calculate VAT

You can find useful GST calculators on the web – just search for ‘NZ GST calculator’. And don't forget that GST will not affect the prices of goods or services that are zero-ratedGST-exempt, or classified as special supplies.

What are VAT invoices?

A VAT invoice tells a customer how much VAT they paid on a purchase. It’s important information because some of your customers may be able to claim that tax back. If you’re VAT registered, you must issue VAT invoices.

VAT invoice example

Here are the details you need to provide on a VAT invoice.

How to issue a VAT invoice

VAT tax point

If you’re issuing an invoice more than two weeks after goods or services were delivered, add an extra line to your invoice saying ‘VAT tax point’ with the date of delivery next to it. This can help your business customers claim the VAT back sooner.

Chapter 4: Claiming VAT back

Find out about the VAT you can claim back from HMRC on business expenses and on VAT you’ve already paid.

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