Tax Codes¶
As of Sales Pack v4.0.
The Tax Codes functionality is the foundation of the tax engine. A tax code is a unique identifier (like VAT20 or EXMPT) that serves two important roles:
- defines tax calculation logic;
- provides reporting capabilities.
Every document line item must have an associated tax code, even when tax is not applicable (for this, zero-rate tax codes are used).
Tax codes can be enabled or disabled at Administration > Sales Pack Settings > Tax Codes. Having tax codes enabled is recommended.
Access to tax codes is controlled by Roles. Regular users can be granted with edit access. Users that do not have explicit access to the Tax Code scope in their roles, still are able to select tax codes when they create a document.
To manage tax codes go to: Administration > Tax Codes. Here, you can create tax codes.
For a saved document, to view how taxes were applied, click View Tax Details from the menu next to the Edit button. In case of cash basis taxes, you can view applied taxes from a Payment entry.
Tax code parameters¶
Status¶
Indicates whether the tax code is available in the system. Instead of removing tax codes that has been used in transactions, set them Inactive.
Selectable¶
Indicates that the tax code can be selected for line items. Disable this parameter for tax codes that are not meant to be used separately from a composite tax code.
Fore Sales¶
Whether the tax code can be used for sales transactions, such as Quote, Sales Order, and Invoice.
For Purchases¶
Whether the tax code can be used for purchase transactions, such as Purchase Orders and Bills.
Type¶
Available options:
- Percentage. Tax rate is defined by a percentage value.
- Fixed. A fixed amount tax. For example, $10 tax per each item regardless of the unit price.
- Composite. Tax code defines multiple nested tax codes. Use this type when multiple taxes must be applied for a product.
Rate¶
A tax rate in percents. Available only for Percentage type.
Base¶
Specifies which value is used as the tax base.
- Net Amount. The amount excluding taxes.
- Cumulative Total. The net amount plus all previously applied taxes. Has an effect only when the tax code is used in a composite tax.
Apply to Proportional Shipping¶
If enabled, this tax code will be included in proportional shipping tax calculations. You may need to disable this parameter for certain tax codes used in a composite tax.
If the proportional method is not used, this parameter has no effect. The parameter is available only for Percentage type.
Included in Price¶
Whether the tax amount is included in the unit price.
You may need to enable this parameter for taxes like excise. For taxes like VAT or GST, this parameter usually should be disabled.
Rounding Level¶
Defines how tax amounts are rounded.
- Line. Amounts are rounded on each line.
- Total. Precise line-level amounts are summed and then rounded.
The parameter is available only Percentage type.
Items¶
Available for Composite type.
Tax codes that will be applied when this tax code is used for a line item. An order of taxes matters.
Label¶
An optional label to be shown to customers. This label may be used in a PDF invoice. You may leave the label empty for taxes which are not supposed to be shown to customers.
Country¶
Can be used for reporting.