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Your Company Name
123 Business Street
City, State 10001
Country
hello@yourcompany.com
+1 555 000 0000
TAX INVOICE
INV-2025-001
Bill To
Client Name
456 Client Avenue
City, State 20002
client@example.com
Issue Date
Due Date
Description
Qty
Unit Price
Total
Subtotal$0.00
Discount$0.00
Tax (10%)$0.00
Shipping$0.00
TOTAL DUE$0.00
Payment Details:
Bank: Your Bank Name
Account: 1234567890
Payment due within 30 days. Thank you for your business!
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What Is a Tax Invoice (VAT/GST)?
A tax invoice is a legally required document issued by VAT or GST registered businesses when billing other businesses. It differs from a standard invoice in that it must include your tax registration number, your client's tax number (for B2B transactions), the tax rate applied, and the tax amount shown separately. Without these fields, the invoice is not a valid tax document and your client may be unable to reclaim their input tax.
Tax invoices are required in the UK, throughout the European Union, in Australia, India, the UAE, Canada, and most other countries with a VAT or GST system. The core principle is the same: both the seller and buyer need a documented tax trail for the transaction. Only a properly completed tax invoice meets this requirement.
Required Fields on a Tax Invoice
Your VAT/GST registration number - must appear on every tax invoice
Client's tax number - required for B2B transactions in most VAT regimes
Net amount (excluding tax) - shown separately from the tax
Tax rate and tax amount - both must be clearly stated
Gross total (including tax)
Date of supply - when goods/services were delivered (may differ from invoice date)
"Tax Invoice" clearly stated - the document title must identify it as a tax invoice
Frequently Asked Questions
What is the difference between a tax invoice and a regular invoice?
A regular invoice is a general payment request. A tax invoice is specifically designed to comply with VAT or GST legislation - it includes your tax registration number, the tax rate, and the tax amount shown separately. Your VAT-registered clients need a tax invoice to reclaim input tax.
Do I need to charge VAT on all my invoices?
Only if you are registered for VAT or GST. Businesses below the registration threshold in their country do not charge VAT and should not issue tax invoices. Once you register, you must charge VAT on all applicable supplies and issue compliant tax invoices.
What is the reverse charge mechanism?
When billing VAT-registered businesses in other countries (particularly within the EU), the reverse charge often applies - you issue the invoice without charging VAT, and the buyer accounts for VAT in their own country. Your invoice must include a note stating "VAT reverse charge applies" and both parties' VAT numbers.
Can I use a proforma invoice for VAT purposes?
No. A proforma invoice does not count as a VAT or tax record. For VAT purposes, you must issue a full tax invoice after the goods are delivered or services are completed. Your client cannot use a proforma to reclaim input VAT.