Tax lines when you bill across borders

What follows is a description of common treatments in the corridors our customers bill across. Rules change, and your circumstances may differ. Confirm anything here with your accountant before relying on it.

A supply of services to a client outside India is generally an export, and is usually zero-rated for GST when supplied under a Letter of Undertaking.

Your invoice should carry your GSTIN and state that it is an export of services under LUT without payment of IGST. Put that in the tax note field and it appears on the invoice and the PDF.

For a business customer in the EU or UK, VAT is generally reverse-charged: your client accounts for it, not you.

Their finance team will usually expect the invoice to say so explicitly, and to carry their VAT number. An invoice without that note is a common reason for one to be sent back.

The wording most commonly accepted is: "Reverse charge — VAT to be accounted for by the recipient."

On the invoice screen, set the tax label to the name your jurisdiction uses (GST, VAT, Sales Tax) and the rate. Where the rate is zero, the line still appears — which is usually what the receiving accountant wants to see.

The tax amount is calculated from the subtotal on our side, so it always agrees with the lines above it.