In Sweden, it's like Martin Hughes said, and I excpect it's much the same in most EU countries - tax is actually paid based on revenue over a longer period (a month or two). To elaborate, there are two entirely different ways of dealing with VAT, at least in Sweden: - Consumer invoices: Prices include VAT, you calculate and show the VAT amounts for informational purposes only. You do this by summing the amounts by VAT rate and calculate the VAT (backwards). You of course don't re-add the VAT to the total amount, as it's already included. - Company invoices: Prices don't include VAT. You sum the base amounts for each VAT rate on the invoice and then calculate the VAT (one line per VAT rate) at the bottom of the invoice. You then add the total VAT to the total amount of the invoice. A common mistake is to do VAT calculations on the prices - while it should be done only on the invoice total (broken down by VAT rate). You (the selling company) should set a fixed price including and excluding VAT respectively - and since you are free to set your own prices - that calculation doesn't necessarily have to be correct (it's OK to do whatever rounding you like to get presentable prices). On rounding: You can do mathematical rounding (round a.5b upwards always) or banker's rounding (round a.5b upwards if a is odd OR b is non-zero). Details: http://en.wikipedia.org/wiki/Rounding[^] Both methods are allowed by Swedish tax laws. Later,
-- Peter
