# VAT on credit notes

> Correct an issued invoice with a credit or debit note and keep the VAT consistent.

Source: /help/en/vat/credit-notes-with-vat

An issued invoice (submitted, delivered or accepted) is locked. To change it you issue a **Tax credit note (381)** that reduces the amount and the VAT, or a **Debit note (383)** that increases them. Both reference the original invoice.

## Create a credit note

1. Go to **Invoices**, open the row menu of the issued invoice and click **Create credit note** (or **Create debit note**).
2. The editor opens with the document kind set, the preceding invoice reference and date (BT-25, BT-26) filled in, and the buyer and currency copied from the original.
3. Enter the lines you credit with the same VAT categories as the original, so the VAT is reversed in the same groups.
4. Click **Validate**, then **Submit to Taxilla** as for any tax document.

The credit note is written as a UBL CreditNote and reported through the same channel as the invoice.

## Rules Alya Books enforces

| Check | Result |
|---|---|
| The original has not been issued yet | Error: edit the draft instead of issuing a note |
| The original is itself a credit note | Error: a note cannot correct another credit note |
| Preceding reference differs from the original's number | Error |
| Currency differs from the original | Error |
| Note dated before the original | Error |
| Credit exceeds the remaining creditable amount | Error, with the remaining amount shown |
| Buyer TRN differs from the original | Warning |

The remaining creditable amount is the original total plus issued debit notes minus issued credit notes. Drafts and rejected notes do not count.

## VAT effects

- VAT on a credit note is calculated exactly as on an invoice (per category and rate, rounded to fils) and then reduces your output VAT.
- Analytics and Compliance show credit notes with a negative sign.
- Credit notes are not offered payment recording or reminders; settle them against the original invoice's balance in your accounts.

## Good to know

- Self-billed credit notes (261) and out-of-scope credit notes (81) follow the same rules.
- A credit note can also reference an invoice that was not created in Alya Books: leave the original unselected and type the preceding invoice number.

## Related

- [How VAT is calculated and rounded](/help/en/vat/vat-calculation-and-rounding)
- [VAT categories and the TRN](/help/en/vat/tax-categories-and-trn)