Tax rates and VAT rules

Tax rates are the VAT percentages you charge, such as 21%, 9%, 0% for international transport, or reverse-charged VAT. Every quote and invoice line has a tax rate. The rate carries its own ledger codes for your accounting package.

Create a tax rate

1. Open the side menu (☰) and choose Settings.
2. Open the Variables tab.
3. Go to the Tax Rates section.
4. Enter the Name, for example "VAT 21%".
5. Enter the Credit code and Debit code used in your accounting package.
6. Enter the Percentage, for example 21.
7. Switch the toggle on to make the rate active.
8. Click Create.

The table lists every rate with Name, Credit code, Debit code, Percentage and Active. Filter it on Active.

Edit, deactivate or remove

• Click Edit on a row, change the values in the form at the top and click Update (or Cancel).
• Switch a rate off to stop offering it. Inactive rates are not offered for new lines, but lines that already use them keep them.
• Click Remove to delete a rate you never used.

Combine several taxes in one rate

In some places one sale carries several taxes at once: in Québec the federal GST plus the Québec sales tax, in the United States a state, county and city sales tax. Give such a rate Components. Each component is one tax with its own name, jurisdiction, percentage and ledger codes, and invoices and quotes show the tax per component.

1. In the Tax Rates section, click Edit on a rate, or start a new one.
2. Under Components, click + Add component.
3. Enter the Name, for example "GST".
4. Choose the jurisdiction: the country and, if needed, the State / province / region.
5. Enter the Percentage, for example 5.
6. Optional: choose the VAT category (for an exempt category also the VAT exemption reason and Exemption reason code) and enter the Credit code and Debit code of the component.
7. Click + Add component for the next tax. Switch on Compound when that tax is charged on the amount plus the taxes above it.
8. Use Move up and Move down to put the components in order, or Remove to delete one.
9. Click Update or Create.

With components, the Percentage of the rate is read-only and shows the total, calculated from the components. A rate without components works as before.

Example	Components	Rate
Freight within Québec, Canada	GST 5% + QST 9.975% (not compound)	14.975%
A city in Texas	State 6.25% + county 0.5% + city 1.5%	8.25%
A compound tax (fictitious example)	Tax A 5% + tax B 10% (Compound)	15.5%: tax B is charged on the amount plus tax A

• Rounding: the tax of each component is calculated per line and rounded half up to the cent, so the tax of a line is always the sum of its components.
• VAT category: when the rate itself has none, it takes the category of its first component that has one.
• Accounting: accounting packages receive the rate as one tax at its total percentage, under the Credit code and Debit code of the rate itself. Fill those in with the combined code of your package.
• Checks: every component needs a name and a percentage between 0 and 100, and together they can be at most 100%.

Set the default tax rate

1. Open the side menu (☰) and choose Settings.
2. Open the Environment tab.
3. Expand Financial.
4. Choose the rate in Default tax rate.
5. Save the settings.

New quote and invoice lines start with this rate. Without a default, Transportial uses the first active rate.

Choose the rate per line

On a quote or invoice, each line has Select tax rate. The form shows totals Exclusive of VAT (on quotes) or Excluding VAT (on invoices), or Including VAT, depending on the toggle at the top. The totals show one tax row per rate, for example VAT 21% and VAT 9%, and one row per component of a combined rate. See Quotes and Invoices.

Apply VAT automatically with VAT rules

Price configurations and price modules have VAT rules. A rule picks a tax rate when the priced item matches its conditions, for example 21% for domestic transports and 0% for cross-border ones.

1. Open a price configuration (see Set up price configurations).
2. Under VAT rules, click Add VAT line, then click the new Price tax line block.
3. Enter a Name, for example "Domestic transport".
4. Choose the rate in Select tax rate. Only active rates are listed.
5. Optional: add a Description.
6. Add the conditions the priced item must meet. Leave them empty for a rule that always applies.
7. Click Save, then save the price configuration.

Rules are tried from top to bottom; the first rule that matches supplies the rate. Rules on a price module go before the rules of the configuration.

Generate the tax rules

You do not have to write these rules yourself. On the VAT rules tab of a price configuration, Generate VAT rules writes them from the tax scheme of your country: the EU VAT rules for goods transport for EU countries, or the state taxes on freight for the United States. You only choose which of your tax rates applies in each situation. See Generate tax rules from tax schemes.