Set Up Tax Rates

Introduction

Tax Rates allow you to apply different tax rates to items that can be invoiced. Tax Rates are added and configured under Settings/Billing Settings/Tax Rates & Policies. You can Add, Edit and Delete Tax Rates and each Tax Rate may have several components.

• Adding a Tax Rate
• Applying Tax Rate levels
• Next step

Adding a Tax Rate

You can add a Tax Rate by clicking the Add Tax Rate button on the right side of the page. You can specify:

• Name (required) - Enter the Tax Rate name. 
• Rate - The Tax Rate will be automatically calculated based on the percentage rate of its components.
• Type - You can add the Tax Rate type.
• Code - You can add a unique code to identify your Tax Rate.
• Components (required) - Each tax component needs a Name and Rate of its own. All tax components are listed on an invoice.

Applying Tax Rate Levels

Tax Rates can be applied on several levels:

• Global tax rate - You can apply a global Tax Rate for your organization. Go to Settings/Billing Settings/Billing Rules and select a default Tax Rate in the Tax Rate menu. It applies to all products and customers.
  
  
  
  
• Company or member tax rate - You can apply a Tax Rate on a company or member level. To do this, go to Community/Companies and select a company. On the company page, click on Edit Details and in the Billing Details tab, select a default tax rate for the company in the Tax Rate menu. This Tax Rate is applied to all purchases that don't have a specific Tax Rate associated with them.
  
  
  
  
• Product Tax Rate - You can apply a Tax Rate on an account level by editing the Tax Rate Policies under Settings/Billing Settings/Tax Rates & Policies. As each billing plan is associated with a revenue account, applying a Tax Rate on the account will apply it to all invoiced products based on the billing plan.
  

Important

When a new invoice is created, the system determines what Tax Rate to apply by checking the following settings:

1. First, the system first checks the targeted company tax settings. If there is a tax applied on the company, the system uses that value in the invoice.

2. If the company doesn't have a tax applied, the system looks up the tax policy applied (if any).

3. If no tax policy is applied, the system looks up the tax rates for the specific Revenue Account.

4. If the accounts don't have a specific tax applied, the system falls back to the global tax settings under Settings/Billing Settings/Billing Rules.

Next

Set up different tax policies