Tax Rates
Go to the “Workspace” > “Taxes” page to view a list of tax rates. Tax rates vary by country, region, city, etc. For example, if you operate in Europe, you might want to create a catalog of tax rates for OSS VAT. You can create as many tax rates as you need. A tax rate can’t be updated or deleted after creation to prevent invoicing problems, but you can archive it. To create a tax rate, you’ll need to:1
Give it a name
The name appears on your customer’s invoice and is usually a short name that describes the specific type of tax, such as “VAT” or “California state sales tax.”
2
Set a percentage
The percentage is a number that represents the tax percentage to be collected, for example, 20%.
3
Choose whether it's inclusive or exclusive tax
Tax rates can be categorized as either exclusive or inclusive. An exclusive tax is not included in the invoice subtotal, whereas an inclusive tax is.
The table below illustrates how a 25% tax rate modifies the total amount due, depending on whether it is exclusive or inclusive.
Tax | Subtotal | Tax due | Calculation | Total |
---|---|---|---|---|
25% Exclusive | €5.00 | €1.25 | €5.00 + €1.25 | €6.25 |
25% Inclusive | €5.00 | €1.00 | €4.00 + €1.00 (already included in the total) | €5.00 |