When preparing invoices, small discrepancies may arise between the sum of the individual invoice lines and the total amount on your invoice. This article explains why this happens and why it's legally correct.
How do we calculate VAT?
According to VAT legislation, VAT is calculated per VAT rate group.
This means that all invoice lines with the same VAT rate (for example 6% or 21%) are combined, and VAT is calculated on the total of that group.
The result is then rounded to 2 decimal places (cents).
Why do rounding differences occur?
When an invoice contains multiple VAT rate groups, each group is rounded separately. This may result in a slight difference between the sum of the VAT amounts per individual invoice line and the VAT calculated on the total per rate group.
Example:
Suppose your invoice contains two lines with 21% VAT:
Invoice line 1: €231.50 excl. VAT → VAT: €48.615... → rounded up to €48.62
Invoice line 2: €156.50 excl. VAT → VAT: €32.865... → rounded up to €32.87
Sum of the individual VAT amounts: €48.62 + €32.87 = €81.49
VAT calculated on the group total: €388.00 × 21% = €81.48... → rounded up to €81.48
The difference: €0.01
This one cent difference arises because both lines were rounded up separately (€48,615 → €48,62 and €32,865 → €32,87), while the calculation on the group total only rounds once.
This difference of 1 cent is then distributed over the invoice lines within the tariff group.
How do we process this difference?
The rounding difference is distributed cent by cent across the invoice lines within the relevant VAT rate group. This way, the total per rate group always remains mathematically correct, without the need for a separate line item.
What does this mean for you?
Minor deviations are normal
You may see small differences of a few cents on your invoice between the VAT amounts on the individual invoice lines and what you would expect based on the unit rate. These differences are:
Legally correct: VAT is calculated per tariff group and rounded off in accordance with VAT legislation.
Transparently processed: the difference is distributed fairly across the invoice lines within the tariff group
Minimum: it always amounts to a few cents at most
Check your invoice
You can always check whether your invoice is correct by performing the following check:
Total excl. VAT + Total VAT = Total incl. VAT → This must always be correct
Minor deviations on individual lines are due to rounding differences within VAT rate groups.
Is this bad for me?
No, rounding differences can work both to your advantage and disadvantage, depending on the specific amounts. Generally, these differences cancel each other out over several years.
Why isn't the difference on a separate line?
To keep your invoice clear, we distribute the rounding difference across the existing invoice lines. This prevents extra lines for amounts of just a few cents.