In order to create custom tax rate, follow the steps below:

  1. Click Taxes on the left menu.
  2. In Tax Center, click on Add Tax.
  3. A drawer slides out from the right. Here, select the first option "Tax rate".
  4. Enter the Tax Name (eg. ST 4%).
  5. Select the Tax Agency under which you want to create this new tax rate (eg. VAT or Service Tax, etc...).
  6. Select where this new tax rate applies for Sales or Purchases or to Both (*it is advised that you select Both in this drop down).
  7. Enter the Tax rate applied for Sales transaction.
  8. Select the Account type for this tax rate (usually it will be Liability. If in doubt, please consult with your accountant).
  9. In the "Show tax amount on return line" drop box, select "Tax collected on Sales" option. The options that you see may be worded differently depending on the agency you are creating the rate under.
  10. In the "Show net amount on return line" drop bix, select "Taxable Sales Amount" option. The options that you see may be worded differently depending on the agency you are creating the rate under.
  11. Similarly for Purchase transactions, enter the tax rate.
  12. Select the Account type for this tax rate (usually it will be Liability. If in doubt, please consult with your accountant). Please note that in case of agencies where purchase tax is not reclaimable, this account type will be set to Expense by default
  13. In the "Show tax amount on return line" drop box, select "Tax paid on Purchases" option. The options that you see may be worded differently depending on the agency you are creating the rate under.
  14. In the "Show net amount on return line" drop box, select "Taxable Purchase Amount" option.The options that you see may be worded differently depending on the agency you are creating the rate under.
  15. Click Save.

A new tax rate will get created under the Tax Agency you had selected while creating this custom rate. You can see the details of this new rate by clicking the
Edit <Tax Agency Name> - Edit rates button in the Tax Center. E.g. Edit VAT - Edit rates.

 

 

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