Learn how to handle changing tax rates.

Tax rate changes

Whenever a tax rate changes, you'll need to update your items and existing transactions to use the new rate. However, if you use preconfigured rates or you're a new user setting up a tax rate for the first time, the new rate will be added to your list of taxes automatically.

The following list of scenarios will help you determine where you need to update your rate.

Situations affected by tax rate changes

Current products and services list

Manually adjust the rate for each item to the new value.

Recurring transactions that use the old tax rate

Manually adjust those transactions to use the new rate.

Invoices created before the tax change date but future-dated

If the product or service will not be provided until after the date of the tax change, you'll need to manually adjust the rate on the invoice to reflect the new rate.

Invoices created on or after the tax change date but back-dated

If you provided goods or services before the date of the tax change, but didn't issue the invoice at the time of the sale, you'll need to adjust the rate on the invoice to the new rate.

Outstanding purchase orders created before the tax change date with a corresponding bill created after that date

Manually adjust the rate for those transactions to the new rate.

Outstanding estimates created before the tax change date with a corresponding invoice created after that date

Manually adjust the rate for those transactions to the new rate.

Combined rates that include the old rate

Combined/group rates can't be edited. You'll need to create a new group rate to use the new rate. Give the new group rate a different name to help you recognise it as the latest one.

For detailed information on how a tax rate change affects you, visit the website for your tax agency.