Overview

Item tax types are tax configurations used to connect multiple tax types to an item or service within our ERP system. These configurations ensure that the correct taxes are applied during transactions. All item tax types are available in a drop-down menu on the New Item screen, allowing users to select the appropriate tax configuration for each item or service.

Configuration of Item Tax Types

Creating Item Tax Types

1. Accessing Item Tax Types: Navigate to the Item Tax Types page to create and manage item tax types.
2. Creating a New Item Tax Type:
• Enter a name for the new item tax type.
• Select the applicable tax types from the list by checking the appropriate checkboxes.

Example

Tax Name	Rate	Is exempt
VAT	10.0 %
ZERO rated	0.0 %
VAT 5%	5.0 %

Assigning Item Tax Types

1. New Item Screen: When creating a new item or service, select the appropriate item tax type from the drop-down menu.
2. Grouping Tax Types: Configure the item tax type by grouping multiple tax types as needed. This ensures that the correct taxes are applied during transactions.

Applying Item Tax Types in Transactions

Based on the assigned item tax types and tax groups, the system will automatically calculate the applicable taxes when creating invoices for transactions.

Exemptions and Multiple Tax Types

Exempt Items

Some items or services may be fully exempt from taxes. To configure an item as exempt, check the appropriate checkboxes for the exempted tax types.

Multiple Tax Types

Items and services can have more than one tax type connected. When configuring these items, ensure that all relevant tax types are selected. Unchecked boxes indicate that the tax type is included in the calculation.

Identifying Differences

• Tax Groups: For tax groups, select the included tax types by clicking the checkboxes.
• Item Tax Types: For item tax types, check the boxes for exempted tax types.

Summary

Item tax types allow for the accurate application of multiple tax types to items and services within the ERP system. By properly configuring item tax types and assigning them to items, the system ensures correct tax calculations during transactions. Exemptions and multiple tax types can be managed by selecting the appropriate checkboxes during configuration, ensuring compliance with tax regulations and business requirements.