Table of Contents
Calculate VAT proportionally domestic to international
The Calculate VAT proportionally domestic to international option is introduced in the Admin Panel > General Settings > 'Sales Module' tab.
The 'Calculate VAT proportionally domestic to international' option allows to calculate the VAT rate on both domestic and international flights proportionally to the flight time within the country.
How it works
If this setting is applied, the VAT rates are calculated separately for each country and added to give the final VAT rate, as per below:
A. VAT rate for the country
B. Flight time for the domestic flight
C. Total flight time within the trip, subject to the 'Include ferry flights' setting
The formula is as follows:
A x B / C = Country VAT rate
VAT rates are not calculated for the International flights.
Example
In this example, the trip consists of three flights of which two are domestic - Poland and France - and one is international.
Total flight time for all 3 flights is 03:30.
VAT rates are 9% for Poland and 10% for France.
The calculations of VAT rate are as follows:
- Leg 1 - Domestic in Poland - Flight time is 00:30 - Calculation: 9% x 00:30 / 03:30 = 1.28%
- Leg 2 - International flight - Calculation: VAT = 0%
- Leg 3 - Domestic in France - Flight time is 01:00 - Calculation: 10% x 01:00 / 03:30 = 2.86%
Based on the above 3 legs calculations, VAT rate calculated for this trip is 4.14%:
1.28% + 2.86% = 4.14%