If a supplier is not VAT registered, what Tax Type must I select when I capture a bill for them?

Hello there, Fatima.
 

When entering a bill for a supplier who is not registered for VAT in QuickBooks Online, you should select Out of Scope of Tax. This choice ensures that VAT is not applied to transactions with these suppliers, as they are not registered under VAT regulations and cannot charge VAT on their goods or services.

Here's a brief overview of the Tax Types in QBO:

1. VAT (Value-Added Tax)- a consumption tax added to goods and services, usually at a standard rate.
2. Zero-rated VAT- VAT charged at 0% on specific goods/services, allowing input tax credits.
3. Exempt VAT- transactions not subject to VAT; no VAT charged or claimed.

You can choose to view descriptions of various tax types in QuickBooks, rather than just their definitions along with the corresponding rates that are set.

Here’s how:

1. Go to the VAT tab.
2. At the upper right corner, click the dropdown of Edit VAT.
3. Select Edit rates.
   
   

It's always a good idea to confirm with your accountant if you're unsure about which Tax Type is correct for a particular transaction to ensure compliance with the local VAT regulations.

Please let us know if you have further questions. The Community is always here to respond.