This article is specifically for business accounts in regions that use a mix of VAT (tax-inclusive) and non-VAT (tax-exclusive) amounts to calculate taxes.
In this article, you will learn how to set up such tax mixes so that it automatically applies to the transaction in the Point of Sale (POS).
Note: If your account is already set up as a tax-inclusive account or VAT enabled account, then all the existing tax types will have the Tax Included in Price checkbox enabled by default.
Setting up such tax types is a 3-step process:
- Create or edit the Tax Type to include the tax amount in the price
- Create or edit the Tax Group to include a mix of tax types
- Ensure the services or products have the correct group assigned
Create or Edit the Tax Type to Include the Tax Amount in the Price
To enable the setting:
- Navigate to Admin > System Settings.
- Expand POS Settings and click Tax Type.
- Click Add to add a new tax type or click Edit on an existing tax type.
- Complete the fields as follows:
- Description: Enter the name of the tax type in the field.
- Tax Rate: Enter the tax rate (in percentage).
- Tax Included in Price: Select the checkbox if you use a tax-inclusive setup.
- [Optional] Threshold: If the tax applies only after a certain value is spent, then enter that amount in the field.
- Click Add or click Update.
The tax type gets added to the list of taxes.
Create or Edit the Tax Group to Include a Mix of Tax Types
You can create a tax group with a combination of tax-inclusive and tax-exclusive tax types. For instance, VAT is a tax-inclusive tax type which means tax is included in the price and Local Taxes are additional taxes that are not included in the service price – which makes it tax-exclusive.
Under tax groups, you can combine both these tax types and apply it to each of the services or products you sell at your location.
Important: If you use the Compound Tax method, all Tax-inclusive tax types are automatically disabled.
To create a new tax group:
- From the main menu, navigate to Admin > System Settings.
- Expand POS Settings and click Tax Group.
- Click Add new tax group at the top-right of the page.
- Enter the name of the tax group in the Tax Group Description field.
- Click the Tax Type checkbox(es) () from the list of tax types provided.
Ensure the Services or Products have the Correct Tax Group Assigned
You will need to make sure that the services and products that you offer have the new tax group (created in the above section) assigned to them.
Read: Step 3 in Create a Service and step 3 in Add a Product.