Line items, the VAT engine, and what determines your rate

Why VAT applies at proposal level, not per line. EU VAT Directive Art. 226 requires every invoice to disclose the rate used and the VAT amount per rate. In freelancer practice, all line items on a single invoice typically share one rate (you don't sell mixed-rate goods like a supermarket). Clozo enforces this: one proposal, one VAT rule, one rate. If you genuinely need mixed rates (e.g., consulting at 19% plus reduced-rate ebook royalties at 7% in Germany), split into two proposals.

The seven VAT rules and when each fires (from apps/vat/engine.py:calculate_vat):

Critical: the §14c UStG double-VAT trap. If you're a German Kleinunternehmer and you accidentally print a VAT line on an invoice (manual override, copy-paste from a template), German tax law treats that as a binding charge — you owe the listed VAT to the Finanzamt even though you don't owe it under the regime. Clozo's engine refuses to add a VAT line when the regime is kleinunternehmer, so this trap is closed by default. The same logic applies to NL KOR and ES franquicia.

Manual override (vat_rate_override): there's an escape hatch on the create-proposal form — vat_rate_override accepts an integer 0–27 to force a rate. Use only when the engine genuinely cannot infer correctly (e.g., a margin-scheme reseller). When set, the proposal's vat_breakdown records the override flag for audit; the PDF still passes EU compliance because the legal note is generated from the override, not paraphrased.