Given that you're running a business in countries like the USA or Canada, there is a need to break down your tax according to city, county, and state. With the introduction of our Tax Type component, you can easily get this up and running in no time!
Part 1 (Manual)
Navigate to Settings > Configuration > Tax Types
Click on the ‘New Tax Type’ button on the top right-hand corner. Fill in the Name, Code, Tax Type, and the relevant tax components. There are 3 main tax types to select from the drop-down:
- Sales Tax – can only be applied to sales orders and customer relationships
- Purchases Tax – can only be applied to purchase orders and supplier relationships
- Both Sales and Purchases Tax – can be applied to sales/purchase orders and customer/supplier relationships
Once you've filled up the relevant information, just click on the 'Create’ button and you're done! 🎉
Tick the ‘Has compound tax’ if you need to impose a tax charge on top of the primary tax.
Part 2 (From Xero)
If your TradeGecko account is already integrated with Xero, you can link it up with your Xero's Tax Type. You can also import the Tax Type from Xero to TradeGecko by selecting any of the checkboxes followed by the ‘Save Changes’ button.
This would then show up when you create a sales/purchase order.
Part 3 - An example of Sales Order with New Tax Types
Go to Sales Orders > Orders > and add a line item to your respective sales order. Click on the TAX column and a dropdown box should appear, allowing you to select from the various tax types available.
You will only be able to select sales or dual-use tax types.
If your business deals with a long list of different taxes, you can manually type in the tax amount in the input field, and the drop-down will only display the compatible tax types with that same tax amount (e.g. 15% in the example below).
If there are no existing tax types of a certain amount, you can also click the option to ‘Create A New Tax Type’ to set up a new one.
After you've made your selection, click on ‘Save’. The tax components will be reflected right below.
Variants have tax configuration. You can enable or disable the option ‘This Item is Taxable’ from the Inventory > Variants > Details tab.
- Enabled – the order line item will reflect the default tax type assigned to the Company (if the Company has a default sales tax set). If not, the order line item will reflect the default sales tax you have set on your account.
- Disabled – TradeGecko will automatically assign a Tax Exempt rate on the order line item.
That's it! Who knew handling taxes could be so easy!? 🤗