Tax and VAT setup

Quick answer

Tax rates in Uku control how VAT and other taxes are calculated on your invoices. Configure them once in Settings & Apps > Billing > Setup > Taxes, then assign them to products, contract rows, or individual invoice lines. When VAT rates change due to legislation, use the manual approach (create new rate, update products and contracts, archive old rate) or the Billing Tools bulk updater.

Who can do this

• Company Owners and Company Admins can manage tax rates and billing settings.
• The Billing feature must be enabled for your company.

Where to find tax settings

Path: Settings & Apps > Billing > Setup > Taxes

1. Open Settings & Apps from the main navigation.
2. Select Billing.
3. Click the Setup tab.
4. Click the Taxes panel to expand the list of tax rates.

Each row shows the percentage, description, integration code, source (if synced from accounting software), last updated date, and status.

Adding a new tax rate

1. Expand the Taxes panel in the Setup tab.
2. Click Add in the panel header.
3. Fill in the fields:

• Description (required) — a label your team sees when picking a tax, for example “VAT 22%” or “Zero-rated”.
• Percent — the tax percentage, for example “22” or “9.5”. Leave empty for zero-tax entries.
• Integration Id / Integration Code — only needed if you sync taxes with external accounting software.
• Name on invoice — the label printed on the invoice PDF next to the tax amount (for example “VAT” or “GST”). If left empty, Uku uses the description.

1. Click Save.

The new tax rate is immediately available for selection on products, contract rows, and invoice lines.

Editing an existing tax rate

Click any row in the Taxes list to open the edit dialog. Change the fields you need and click Save.

If the tax was imported from an accounting integration, the Description, Percent, Integration Id, and Integration Code fields are locked and must be updated in your accounting software. You can still edit the Name on invoice field to control how the tax label appears on PDFs.

Archiving and restoring tax rates

You cannot permanently delete a tax rate because it may be referenced by existing invoices. Instead, archive it:

• Archive — open the tax and click Archive. Archived taxes are marked Inactive and no longer appear in tax dropdowns when creating new products or invoices.
• Restore — open an archived tax and click Restore. For taxes imported from an integration, the options are Hide and Show instead. Hidden taxes behave the same way — they stay in the system but are excluded from selection dropdowns.

How taxes appear on invoices

Each invoice line carries its own tax assignment. The tax is typically inherited from the product or contract row, so you only need to set it once at the product level.

In the invoice totals section, Uku groups taxes by rate and label. If an invoice has lines at 22% and lines at 9%, the totals show:

• Subtotal (sum without tax)
• VAT 22%: (amount)
• VAT 9%: (amount)
• Total (sum with tax) Taxes with different Name on invoice values are shown as separate line items in the breakdown even if the percentage happens to be the same.

Multi-rate invoices

Uku supports multiple tax rates on a single invoice. Each invoice line independently stores its tax rate, so you can mix standard-rated, reduced-rate, and zero-rated lines freely. No special configuration is needed — just assign the correct tax to each product or line.

Default tax on products and contracts

The most efficient way to handle taxes is to set the tax rate at the product level. Open a product in Settings & Apps > Billing > Setup > Articles and select the default tax rate. Any contract row or invoice line that uses this product inherits its tax rate automatically.

If a contract row needs a different tax than the parent product, you can override it directly on the contract row.

Reverse charge for EU cross-border services

When you sell services to a VAT-registered business in another EU country, the buyer accounts for VAT instead of the seller. Uku supports this through a Reverse charge setting on each contract:

1. Open the client’s contract.
2. Check the Reverse charge checkbox in the contract settings.
3. Save the contract.

When reverse charge is enabled, invoices generated from that contract include the standard EU notice: “Services subject to the reverse charge — VAT to be accounted for by the recipient as per Article 196 of Council Directive 2006/112/EC.” This text appears automatically in the invoice footer and is translated to match the invoice language.

Updating VAT rates when legislation changes

When a government changes a VAT rate, you have two approaches:

Approach 1 — Manual (recommended for careful control)

1. Create a new tax rate with the new percentage and description (for example “VAT 22%”).
2. Update your products — open each affected product and switch the Tax dropdown from the old rate to the new one.
3. Update active contracts — contract rows that reference the old tax rate continue using it until you update them. Open each active contract and change the tax on affected rows.
4. Archive the old rate once no active contracts reference it. This removes it from dropdowns while preserving it on historical invoices.

Important: Do not edit the percentage on an existing tax rate. Existing invoices reference the tax by ID — changing the percentage would cause the description (for example “VAT 20%”) to no longer match the actual rate. Creating a new entry is always cleaner.

Approach 2 — Bulk update using Billing Tools

Use this when you need to update many clients at once.

1. If the VAT change applies only to certain clients, create a client group for them first.
2. If you use an accounting software integration, import the updated rates: Settings & Apps > Billing > Setup > Import lists. Otherwise, add the new rate manually.
3. Open Billing > Tools.
4. If applicable, select the client group.
5. Choose the old VAT rate (to replace) and the new VAT rate.
6. Select where to apply the update: products, master contracts, client contracts, or invoice drafts.
7. Confirm your selection.

Uku processes the update and confirms how many products, templates, or contracts were changed.

Note: Uku does not update already-confirmed invoices. Invoices confirmed before the bulk update retain the old VAT rate. If needed, create credit notes for those invoices and re-issue them with the new rate.

Importing taxes from accounting software

If you have an accounting integration connected (Merit Aktiva, Xero, QuickBooks, and others), you can import tax rates directly:

1. Go to Settings & Apps > Billing > Setup.
2. Click Import lists at the bottom of the page.
3. Choose Only new or Import everything (which also overwrites existing entries). Imported taxes show their source in the Source column. Their core fields are locked in Uku and managed by the external system.

Troubleshooting

The new VAT rate does not appear in the dropdown

If you use an accounting software integration, import the latest rates first via Settings & Apps > Billing > Setup > Import lists. Or add the new rate manually in the Taxes panel.

Some contracts were not updated after a bulk action

Verify that the affected clients are included in the correct client group and that you selected the right target (products, master contracts, client contracts, or invoice drafts).

Already confirmed invoices still show the old VAT rate

Uku does not retroactively update confirmed invoices. Create credit notes for invoices confirmed before the update, then re-issue them with the correct VAT rate.

An integration-synced tax rate has the wrong name on my PDFs

The Name on invoice field can be edited locally even for integration-synced taxes. Open the tax rate in Settings & Apps > Billing > Setup > Taxes and update the Name on invoice field.