Flat-rate VAT method
Under the net tax rate method, VAT is accounted for as a percentage of gross turnover without recording input tax document by document; it is open to smaller businesses and the rates are set per industry by the tax administration.
Definition
The advantage is the effort: no input tax code per incoming invoice, no input tax corrections, a half-yearly return. The drawback shows up with investments — input tax on a machine is already accounted for in the flat rate and cannot be deducted on top.
Switching between methods is bound to deadlines and triggers corrections on inventory. It pays off over several years, not over a quarter — and the calculation depends on the share of purchases in turnover.
Where to read it
What the software must be able to do
Not every solution handles both methods equally well. Check whether several net tax rates are possible in parallel — businesses with two activities need two — and whether a change of method can be represented without revaluing inventory.
Checked Aug 2026
More terms under VAT and customs: Acquisition tax Customs declaration Effective method Exempt supplies Input tax Margin taxation Non-consideration Own use Place-of-recipient rule Reduction of consideration Takeaway 2.6 vs. eat-in 8.1 Value added tax VAT 3.8 % accommodation VAT 8.1 / 2.6 / 3.8 % VAT liability