A tax group, the tax code you pick on a line, bundles the tax rates that apply to an item so the right tax calculates automatically. It is the user-facing handle on what can be a layered tax setup underneath.
- What a tax group contains
- How a group can carry more than one rate
- How input and output tax post separately
Anatomy
A tax group has a code, a name and a description, and belongs to a tax system (such as Malaysia's SST). It contains one or more tax items, each pointing to a tax rate, in sequence, so a single line can carry more than one tax where the law requires it.
How it behaves
Selected per line
You choose a tax group per line in the document editor; its items then compute their amounts on that line. Bundling the rates into one code means the person raising a document picks a meaningful label, not a percentage, and cannot forget a component.
Input and output tax
Tax on purchases (input tax) and tax on sales (output tax) post to different ledgers. That separation is exactly what makes a tax return computable: each side is a ledger balance you can read straight off the books.
Edge cases and good practice
- Group, do not stack by hand. Where two taxes apply, build them into one group rather than adding lines.
- Pick the right system so the group reports under the correct regime.
Related
- How to: Configure taxes
- Reference: Tax Rates