Tax

Tax

The Tax module allows you to define and manage the different tax rates (such as VAT, Sales Tax, or GST) used by your organization. By setting up taxes here, the system can automatically calculate tax amounts on invoices and bills, and route those amounts to the correct accounting ledgers.

When Do I Use This?

• When setting up your financial system for the first time to reflect your local tax laws.
• When the government introduces a new tax rate.
• When you need to separate taxes for different types of products or services (e.g., standard rate vs. zero-rated goods).
• When you need to update an existing tax rate (e.g., a tax rate increases from 10% to 15%).

How To Use

Creating a New Tax Rule

1. Go to Financial → Taxes from the main menu.
2. Click + New to create a new tax record.
3. Enter a clear Name for the tax (e.g., "Standard VAT 15%").
4. Input the exact tax percentage in the Ratio field.
5. Select the appropriate ledger accounts for both Account Payable and Account Receivable.
6. Ensure the Active box is checked.
7. Click Save.

Disabling an Old Tax Rate

If a tax rate is no longer legally valid, you should disable it rather than delete it.

1. Open the outdated tax record from the list.
2. Uncheck the Active box.
3. Click Save. The system will stop offering this tax rate on new invoices, but your historical records will remain perfectly intact.

Field Descriptions