Taxation
Setting up tax codes
Create VAT rates and assign them to products and transactions.
4 min read
Tax codes define the rate and type of tax applied to a transaction line. You can create multiple codes for different rates (standard, reduced, zero-rated, exempt).
- 1Go to Taxation → Tax Codes and click New Tax Code.
- 2Give the code a name (e.g. VAT 18%, VAT 0%, Exempt).
- 3Enter the rate as a percentage.
- 4Assign the output tax GL account (for sales) and the input tax GL account (for purchases).
- 5Assign the tax code to products as the default, or override it line by line on transactions.
Zero-rated and exempt are different. Zero-rated sales carry 0% VAT but are still VAT-able supplies reported on your return. Exempt supplies are outside the VAT system entirely.