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Tax Templates in Sales Transactions

This page describes how Tax Templates will be chosen and offered as defaults in sales transactions, including Quotations, Sales Orders and Sales Invoices.

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Whenever you sell an Item, you will need to charge VAT and/or other sales tax in order to comply with local tax regulations. You will therefore need VAT/tax to be calculated in each transaction, and you will need to account for that VAT/tax in the Nominal Ledger.

In some countries (for example, most countries in Europe), each Item that is sold (e.g. each row in an Invoice) will be taxed at a single rate. In this situation, you can use VAT Codes to calculate and account for the tax. Each row in the Invoice will have its own VAT Code. For example, an Item that is taxed at the national standard rate will have a VAT Code that calculates VAT/tax at that rate, while a zero-rated Item will have a different VAT Code that calculates VAT/tax at a 0% rate.

In other countries (for example, Brazil and the US), each Item that is sold will be taxed using different taxes and/or several tax rates. In this case, you should use Tax Templates to calculate and account for the tax. A Tax Template allows you to apply several taxes to a single transaction (e.g. to a single row in an Invoice). A Tax Template is a tax structure, built up using a number of VAT Codes.

If you need to use Tax Templates, you should select the Use Tax Templates for Tax Calculation option in the