A tax rate is the actual figure behind a tax item, the percentage or fixed amount that does the arithmetic. It is the leaf of the tax setup, and each rate has its own ledger on the chart of accounts so the tax it generates is tracked in its own right.
- What a tax rate holds
- Why each rate has its own ledger
- How rates sit beneath groups
Anatomy
A rate carries a code, a percentage (or a fixed amount), a description and an active flag. It is a subsidiary of a tax group, reached through a tax item, and posts to its own GL ledger.
How it behaves
Each rate is its own ledger
Because a rate posts to a dedicated ledger, the tax it raises is a visible balance, separate from every other tax. The amount you owe or reclaim for a given tax is therefore just that ledger's balance, which is what makes filing a matter of reading the books rather than re-deriving figures.
Beneath the group
You rarely select a rate directly; you select the group, and the group's items bring in the rates. Defining rates cleanly, one per real tax, keeps the groups above them simple to assemble.
Edge cases and good practice
- One rate per real tax. Keep rates atomic so groups can combine them freely.
- Retire with the active flag rather than deleting, so historical documents and their tax ledgers stay intact.
Related
- How to: Configure taxes
- Reference: Tax Groups
- Reference: Chart of Accounts