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Value added tax (VAT) clause: Copy, customize, and use instantly

Introduction

A Value Added Tax (VAT) clause establishes how VAT will be handled between the parties for the provision of goods and services. This clause ensures that both parties understand their obligations concerning VAT, including responsibility for payment, compliance, and any VAT-related adjustments. It is essential for transactions where VAT is applicable.

Below are templates for VAT clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

Standard VAT clause

This version includes general VAT terms.

All payments made under this Agreement are exclusive of VAT. The [Company] shall charge VAT at the applicable rate on all invoices issued, and the [Investor] agrees to pay the VAT in addition to the agreed fees. VAT will be invoiced separately and will be paid at the same time as the principal payment.

VAT clause with VAT registration details

This version includes VAT registration details.

The [Company] is registered for VAT purposes under VAT registration number [VAT Number]. All VAT charges will be based on the applicable rate in [Country]. The [Company] will issue VAT invoices in compliance with the VAT laws of [Country].

VAT clause with VAT on expenses

This version includes VAT on expenses.

If the [Company] incurs any VAT on expenses related to the provision of services under this Agreement, the [Investor] agrees to reimburse the [Company] for any VAT paid, provided the [Company] provides appropriate documentation of the VAT charges.

VAT clause with VAT exemption

This version includes VAT exemption.

The [Company] agrees to provide services that may be exempt from VAT under applicable law. If any of the services under this Agreement qualify for VAT exemption, the [Company] will notify the [Investor] and will not charge VAT on those particular services. Any exempt services will be clearly indicated on the invoice.

VAT clause with VAT adjustments for rate changes

This version includes VAT adjustments for rate changes.

If the applicable VAT rate changes during the term of this Agreement, the [Company] will adjust the VAT charged in line with the new rate. The [Investor] agrees to pay the revised VAT amounts without delay, following the change in VAT rate.

VAT clause with VAT withholding obligation

This version includes a VAT withholding obligation.

If required by law, the [Investor] agrees to withhold VAT from any payments made to the [Company] and remit the withheld VAT directly to the tax authorities. The [Company] will provide the necessary documentation to the [Investor] for the withheld VAT payment.

VAT clause with cross-border VAT treatment

This version includes cross-border VAT treatment.

If the services under this Agreement are provided across borders, the VAT treatment will be governed by the relevant VAT laws in the country where the services are consumed. The [Company] and [Investor] will cooperate to ensure that the correct VAT treatment is applied based on the place of supply.

VAT clause with VAT-inclusive pricing

This version includes VAT-inclusive pricing.

The prices set forth in this Agreement include VAT at the prevailing rate. If the VAT rate changes, the [Company] will adjust the pricing accordingly, and the [Investor] agrees to pay the adjusted price inclusive of VAT.

VAT clause with VAT refund responsibility

This version includes VAT refund responsibility.

If the [Investor] is eligible for a VAT refund, the [Investor] is responsible for applying for and receiving the refund directly from the tax authorities. The [Company] will provide all necessary documentation to support the refund claim.

VAT clause with VAT recovery for international services

This version includes VAT recovery for international services.

If the [Investor] is a business established outside [Country], the [Investor] may be eligible to recover VAT on services rendered under this Agreement, subject to the applicable VAT recovery laws. The [Company] will assist in providing necessary documentation to facilitate the VAT recovery process.

VAT clause with VAT liability for non-compliance

This version includes liability for non-compliance.

The [Company] and the [Investor] agree to comply with all VAT laws applicable to this Agreement. In the event that either party fails to comply with VAT regulations, the party at fault will be responsible for any penalties, fines, or additional VAT liabilities incurred as a result of non-compliance.

VAT clause with VAT on subcontractor costs

This version includes VAT on subcontractor costs.

If the [Company] hires subcontractors to perform services under this Agreement, the [Company] will ensure that any VAT on subcontractor invoices is passed through to the [Investor] in the total invoice amount. The [Investor] will be liable to pay the VAT for these subcontractor services in accordance with the VAT terms outlined in this clause.

VAT clause with VAT on reimbursements

This version includes VAT on reimbursements.

Any reimbursements made to the [Company] for expenses incurred during the course of the project will include VAT if the [Company] is required to pay VAT on those expenses. The [Investor] agrees to reimburse the [Company] for VAT paid on these expenses in addition to the original cost.

VAT clause with VAT charge on cancellation fees

This version includes VAT on cancellation fees.

If the [Investor] cancels any services under this Agreement and is subject to a cancellation fee, the [Company] will charge VAT on the cancellation fee in accordance with applicable VAT rates. The [Investor] agrees to pay the VAT amount in addition to the cancellation fee.

VAT clause with reverse charge mechanism

This version includes the reverse charge mechanism.

If the reverse charge mechanism applies, the [Investor] will account for the VAT on behalf of the [Company]. The [Investor] agrees to self-assess and remit the applicable VAT directly to the tax authorities in compliance with applicable VAT regulations.

VAT clause with VAT on third-party services

This version includes VAT on third-party services.

If third-party services are required to complete the project, the [Company] will invoice the [Investor] for any VAT applicable to those services. The [Investor] agrees to pay VAT for any third-party services in accordance with the project budget.

VAT clause with exclusion for non-VATable services

This version excludes non-VATable services.

Any services under this Agreement that are not subject to VAT under applicable tax law will be excluded from VAT charges. The [Company] will clearly indicate any non-VATable services on the invoice, and the [Investor] will not be liable for VAT on those items.

VAT clause with VAT-inclusive project costs

This version includes VAT-inclusive project costs.

The total cost for the [specific project] includes all applicable VAT charges. The [Investor] will pay the total project cost, inclusive of VAT, as per the payment schedule outlined in this Agreement.

VAT clause with VAT invoice format

This version specifies the VAT invoice format.

The [Company] will issue VAT-compliant invoices in the standard format prescribed by local tax authorities. The invoices will include the VAT registration number, a breakdown of the VAT charges, and the total VAT due.

VAT clause with adjustment for VAT non-deductibility

This version includes VAT non-deductibility adjustments.

If the [Investor] cannot claim a VAT deduction for any portion of the project costs, the [Company] will adjust the payment schedule to reflect the non-deductible portion of the VAT. The [Investor] will be liable to pay the non-deductible VAT amount.

VAT clause with VAT on prepayments

This version includes VAT on prepayments.

If the [Investor] is required to make any prepayments for the project, VAT will be applied to the prepayment amount. The [Investor] agrees to pay VAT on the prepayment at the applicable rate at the time the payment is made.

VAT clause with joint liability

This version includes joint liability for VAT.

Both parties acknowledge joint responsibility for any VAT obligations arising under this Agreement. If either party fails to meet their VAT obligations, both parties agree to equally share any resulting penalties or interest charges.

VAT clause with tax registration details

This version includes tax registration details.

The [Company] shall provide its VAT registration details to the [Investor] within [X] days of the Agreement's execution. Any changes to the registration number must be communicated promptly.

VAT clause with exclusion of VAT on non-taxable services

This version excludes VAT on non-taxable services.

Services provided by the [Company] that are deemed non-taxable under applicable VAT law will not attract VAT charges. The [Investor] will not be required to pay VAT for these services.

VAT clause with adjustment for VAT rate changes during the term

This version includes VAT rate changes.

Should the VAT rate change during the term of this Agreement, the [Company] will adjust the applicable VAT charges in line with the new rate and notify the [Investor] of any impact on the project costs.

VAT clause with VAT due on first payment

This version specifies VAT due on the first payment.

VAT is due on the first payment made under this Agreement and will be included in the initial payment amount. The [Investor] agrees to pay the VAT portion along with the principal payment.

This version includes VAT treatment for related party transactions.

If any part of the services under this Agreement involves a related party transaction, the VAT treatment for those services will be assessed in accordance with local tax regulations and any applicable transfer pricing rules.

VAT clause with exempt services

This version includes exempt services.

Certain services provided by the [Company] under this Agreement may be exempt from VAT. These services will be clearly outlined in the contract, and no VAT will be charged on the exempt portion of the service.

VAT clause with adjustment for VAT non-compliance

This version includes adjustment for VAT non-compliance.

If either party fails to comply with VAT regulations, resulting in additional VAT liabilities, the responsible party will bear the full cost of any fines, penalties, or adjustments required by the tax authorities.

VAT clause with VAT refunds for export services

This version includes VAT refunds for export services.

If the services provided under this Agreement qualify for a VAT refund due to export, the [Company] will assist the [Investor] in obtaining the refund from the tax authorities, provided the [Investor] submits the necessary documentation.

VAT clause with international VAT treatment

This version includes international VAT treatment.

If services under this Agreement are provided across international borders, the VAT treatment will comply with the relevant VAT regulations in the jurisdictions where the services are supplied. The [Investor] may be liable for VAT in the jurisdiction of supply.

VAT clause with VAT on additional work

This version includes VAT on additional work.

Any additional work performed outside of the initial scope of services may be subject to VAT, which will be charged separately and outlined in the invoice for the additional work.

VAT clause with VAT exclusion for government contracts

This version excludes VAT for government contracts.

If the [Investor] is a government entity or tax-exempt, the [Company] will exclude VAT from the total project cost, subject to verification of the [Investor]’s tax-exempt status.

VAT clause with VAT for subcontracted services

This version includes VAT on subcontracted services.

The [Company] will charge VAT on any subcontracted services that are necessary for the project. The [Investor] agrees to pay VAT on these subcontracted services as outlined in the invoice.

VAT clause with VAT registration verification

This version includes VAT registration verification.

The [Company] will provide the [Investor] with verification of their VAT registration status upon request, ensuring that VAT is being correctly applied to the project.

VAT clause with VAT invoicing procedures

This version includes VAT invoicing procedures.

The [Company] shall issue VAT-compliant invoices for each payment under this Agreement. Each invoice will include the applicable VAT rate, total VAT charge, and the VAT registration number of the [Company].

VAT clause with VAT on ancillary services

This version includes VAT on ancillary services.

Any ancillary services provided under this Agreement, such as administrative support or training, will be subject to VAT at the applicable rate. The [Investor] agrees to pay VAT for these services in addition to the base project costs.

VAT clause with reverse VAT liability for non-resident suppliers

This version includes reverse VAT liability.

If the [Company] is a non-resident supplier, the [Investor] shall assume the responsibility for VAT under the reverse charge mechanism and remit the VAT directly to the tax authorities.

VAT clause with VAT included in payments to third parties

This version includes VAT for third-party payments.

If the [Company] engages third parties for services required for the project, VAT will be charged on the third-party invoices and included in the [Investor]’s payments for those services.

VAT clause with VAT-free services for non-commercial entities

This version excludes VAT for non-commercial entities.

If the [Investor] is a non-commercial entity, such as a charity or educational institution, the [Company] will not charge VAT for the services provided under this Agreement, subject to verification of the [Investor]’s status.

VAT clause with VAT on digital products

This version includes VAT on digital products.

If the project involves digital products or electronic services, VAT will be applied at the applicable rate based on the jurisdiction in which the digital products are delivered.

VAT clause with VAT audit rights

This version includes VAT audit rights.

The [Investor] reserves the right to audit the VAT charges and related invoices at any time during the term of this Agreement. The [Company] agrees to provide all necessary documentation and support to facilitate the audit process.

VAT clause with VAT registration maintenance

This version includes VAT registration maintenance.

The [Company] agrees to maintain its VAT registration in good standing throughout the term of this Agreement and shall notify the [Investor] promptly if its VAT registration status changes or is suspended.

VAT clause with VAT documentation

This version includes documentation requirements for VAT.

The [Company] will provide the [Investor] with VAT-compliant documentation, including invoices and receipts, for all payments subject to VAT. The [Investor] agrees to retain these documents for the necessary tax reporting period.

VAT clause with VAT applied on the final invoice

This version specifies VAT on the final invoice.

The final invoice for the project will include VAT at the applicable rate, based on the final payment amount. The [Investor] agrees to pay the VAT along with the final payment.

VAT clause with separate VAT billing

This version includes separate VAT billing.

VAT will be billed separately from the principal fees for the services provided under this Agreement. The [Company] will issue separate VAT invoices to the [Investor] for VAT-related charges.

VAT clause with VAT refund eligibility

This version includes VAT refund eligibility.

The [Investor] may be eligible for a VAT refund on services rendered under this Agreement, depending on their tax status. The [Company] will provide the necessary documentation to assist in the refund application process.

VAT clause with VAT on additional charges

This version includes VAT on additional charges.

Any additional charges incurred due to scope changes or unforeseen expenses will be subject to VAT. The [Company] will notify the [Investor] of any such charges and apply VAT accordingly.

VAT clause with VAT exemption certificates

This version requires VAT exemption certificates.

If the [Investor] is exempt from VAT, they must provide a valid VAT exemption certificate to the [Company] before the commencement of the project. The [Company] will then exclude VAT from the invoices for the project.

VAT clause with VAT on maintenance services

This version includes VAT on maintenance services.

The [Investor] agrees to pay VAT on any ongoing maintenance or support services provided by the [Company] after the completion of the project, at the applicable rate.

VAT clause with VAT applied on retainer fees

This version includes VAT on retainer fees.

Retainer fees for ongoing services will be subject to VAT at the applicable rate. The [Company] will charge VAT on any retainer payments made under this Agreement.

VAT clause with VAT on goods and services provided

This version includes VAT on goods and services.

The [Company] shall apply VAT on both goods and services provided under this Agreement. The VAT will be calculated based on the value of the goods or services and charged separately in the invoice.

VAT clause with VAT for contract term extensions

This version includes VAT for contract extensions.

If the contract term is extended, VAT will be applied to the extended period based on the services rendered during that time. The [Company] will adjust the payment schedule to reflect VAT for the extension period.

VAT clause with VAT treatment for non-residents

This version includes VAT treatment for non-residents.

If the [Investor] is a non-resident of [Country], the reverse charge mechanism will apply, and the [Investor] shall be responsible for accounting for VAT on any services provided under this Agreement.

VAT clause with VAT application on license fees

This version includes VAT on license fees.

The [Investor] agrees to pay VAT on any license fees paid to the [Company] under this Agreement. The VAT will be charged at the prevailing rate for the license services provided.

VAT clause with VAT applicable on contract amendments

This version applies VAT on contract amendments.

Any amendments to the Agreement that result in an increase in fees will be subject to VAT. The [Company] will issue a revised invoice reflecting the increase in fees and applicable VAT charges.

VAT clause with VAT on reimbursement expenses

This version includes VAT on reimbursement expenses.

The [Investor] agrees to reimburse the [Company] for any project-related expenses, including VAT paid by the [Company] for goods or services used to complete the project. These expenses will be documented and invoiced separately.

VAT clause with VAT on international shipping costs

This version includes VAT on international shipping costs.

If the project involves shipping goods internationally, VAT will be charged on the shipping costs in accordance with local tax laws. The [Investor] agrees to pay VAT on shipping costs in addition to the cost of the goods or services provided.

VAT clause with VAT and payment schedules

This version specifies VAT with payment schedules.

Payments will be made in accordance with the payment schedule outlined in this Agreement. Each payment will include VAT at the applicable rate, and the [Company] will issue an invoice for each payment, showing the breakdown of VAT charges.

VAT clause with VAT on refunds and credits

This version includes VAT on refunds and credits.

If the [Investor] is entitled to a refund or credit under this Agreement, VAT will be adjusted accordingly. Any refund or credit amount will include a proportional reduction in the VAT previously paid.

VAT clause with VAT on third-party licensing fees

This version includes VAT on third-party licensing fees.

If the [Company] incurs third-party licensing fees in the provision of services under this Agreement, the [Investor] agrees to pay VAT on these third-party fees as invoiced by the [Company].

VAT clause with VAT on cancellation fees