Using the double tax

Definition of double tax

Double taxation in VAT terms refers to the situation where a good or service is subject to two separate VAT rates, generally for specific reasons linked to a country’s legislation or the particular nature of certain products or services.

In some countries, businesses have to manage two separate types of VAT, which may be due to :

• National VAT + regional/local VAT (e.g. Canada, USA in some states, some African countries).
• Conventional VAT + a specific tax (e.g. municipal tax in addition to VAT).
• A special system with a VAT surcharge (e.g. certain Latin American countries).

If one of these situations applies to you, you can activate the use of double taxation.

---

Activate double tax by default

From Settings > Invoicing > Invoicing Settings

Invoicing settings

1. Activate double tax
2. Select a tax from the list of VAT rates to be used as secondary VAT
3. Select the calculation method to be used
   1. On the price excluding VAT of the item (The 2 taxes are calculated on the price excluding VAT of the item)
   2. On the price after application of VAT (The second tax is calculated on the price of the item charged with the first tax)
   3. On the amount of the first VAT (the second tax is calculated on the basis of the amount of the first tax)

If double taxation is activated by default, it can be deactivated from a sales document.

If your company is domiciled in a country that does not apply double VAT, this function should not be activated. You run the risk of your sales invoices not being compliant.