How VAT and Subtotal Are Calculated in Wafeq

Wafeq uses a clear calculation method to determine the net amount, subtotal, VAT, and total invoice amount.

The calculation is performed for each item and then grouped based on the applicable ta

How Are the Amounts Calculated?

• Net amount before VAT:
  The net amount is calculated based on the quantity, price before VAT, and any discount applied to the item:

  Quantity × Price Before VAT × (1 - Discount Rate)

  The result is then rounded to two decimal places.

• Taxable amount:
  This is the total net amount of all items under the same tax group, after applying any document-level discount for that tax group.
• VAT amount:
  VAT is calculated by multiplying the taxable amount by the applicable VAT rate. The result is then rounded to two decimal places.
• Subtotal:
  The subtotal is the total net amount of all items before VAT is added.
• Total VAT:
  This is the sum of the VAT amounts for all tax groups in the document.
• Total invoice amount:
  The total invoice amount is calculated by adding the total VAT to the subtotal.

Example

Let's say an invoice includes items subject to 15% VAT and items subject to 0% VAT.

After calculating the net amounts for the items, the results are:

1. Taxable amount at 15%: 10,834.79
2. Taxable amount at 0%: 3,018.27
3. Subtotal:
   10,834.79 + 3,018.27 = 13,853.06

Since there is no document-level discount, the subtotal is equal to the total taxable amount.

Calculating VAT

• 15% VAT:
  10,834.79 × 15% = 1,625.2185
  Rounded to two decimal places: 1,625.22
• 0% VAT:
  3,018.27 × 0% = 0

Therefore:

Total VAT:
1,625.22 + 0 = 1,625.22

Total Invoice Amount

The total invoice amount is calculated by adding the total VAT to the subtotal:

13,853.06 + 1,625.22 = 15,478.28

Total invoice amount = 15,478.28

Note: Calculated amounts are rounded to two decimal places according to Wafeq's calculation method.