Tax Rule

A Tax Rule automatically applies taxes to transactions based on preset rules.

You can define which Tax Template must be applied on a Sales / Purchase transaction using Tax Rule. This is decided by various factors like Customer, Customer Group, Supplier, Supplier Group, Item, Item Group or a combination of these.

1. Prerequisites

Before creating and using a Tax Rule, it is advised to create the following first:

2. How to create a Tax Rule

To create a new Tax Rule list, go to:

Finance > Basics > Tax Rule

You can list Items online using the Website module. Selecting 'Use for Shopping Cart' will use this Tax Rule for Shopping Cart transactions also.

Note: It is advised to not use the Sales/Purchase Template selected here in Item Tax Template, it may cause interference. If you want to use same tax rates for Tax Rule and Item Tax Template, use a different name for the Sales/Purchase Tax Templates

3. Features

3.1 Auto applying Tax Rule based on Customer/Supplier

Select a Customer/Supplier if tax is to be applied for a specific party. Leave it as All Customer Groups/All Supplier Groups if this Tax Rule is applicable to all Customers/Suppliers.

On selecting a Customer/Supplier their Billing and Shipping addresses will be fetched if saved in the Customer/Supplier master.

3.2 Auto applying Tax Rule based on Item / Item Group

On setting an Item or Item group in the Tax Rule, this Tax Rule will automatically be applied to new transactions that have the selected Item/Item Group.

3.3 Setting a Tax Category

Setting a Tax Category allows applying multiple Tax Rules to a transaction based on different factors.

3.4 Validity

Set a Start and End Date if the tax is to be applied only for a specified period. Leaving both dates blank will result in the Tax Rule to have no time limits.

3.5 Priority

Setting a priority number here will decide on which order a Tax Rule will be applied in case multiple Tax Rules have similar criteria. '1' is the highest priority, '2' has lesser priority and so on.