To ensure appropriate taxation, add the necessary tax configurations. After that, you can apply the tax configurations to the necessary services or customer groups by including them in taxation rules. After you create a tax configuration, you can, if necessary, add to the tax configuration different tax rates for different periods.
Note: You may need several tax rates within a tax configuration because, for example, some countries may lower their tax rates temporarily to stimulate the economy.
To add a tax:
- In Billing control panel, go to System > Settings > Taxation > Taxes.
- Click Add New Tax. The adding new tax dialog is displayed. Fill out the form:
- Tax ID: Enter a tax ID. For example: VAT.
- Tax Name: Enter a tax name. For example: VAT.
- Calculation Level: Define how the tax will be calculated by selecting one of these options:
- Level 1: The tax will be calculated as a percent of the service (resource) price only;
Level 2: The tax will be calculated as a percent of the total of the service (resource) price plus all Level 1 taxes. For example, Tax_level_2 = % of (Item_Amount + Tax_Level_1 + Another_Tax_Level_1 + ...).
Your choice must be made based on the tax regulations of your customer's country.
- Calculation Type: Define whether the tax is to be calculated per entire document (invoice) or per each item of the document particularly by selecting the respective option from the group. Since the taxes' resulting amount is rounded, these calculation types can give different resulting value of the tax. Selecting one way or another is also exclusively depends on tax authorities of customer's country:
- Calculate Per Item: The tax is calculated and rounded for each AR document item.
- Calculate Per Document: The tax is calculated for the AR document total.
Apply on:
Note: This option is displayed only for Calculation Type = Calculate Per Item.
- Document Date: When charging a customer, the tax rate effective on the AR document creation date will be applied.
- Billing Period End Date: When charging a customer, the tax rate effective on the end date of the current billing period will be applied depending on the billing model and fee type:
- for the BBP and ABP billing models: Billing Period End Date = the end of subscription period for renewal fees and deposit fees charged on the renewal date.
- for the BSP billing model: Billing Period End Date = the end of the subscription period when calculating taxes for all fee types.
- Extract Tax Amount from Item Amount: If you want the tax amount to be extracted from the service price (rather then added to it), select the option.
- Tax Rate: Enter the necessary tax rate. The fractional part format is "10.00". Please always use the dot as the decimal separator.
- Description: Enter a description.
Note: Billing supports up to 4 decimal places after the dot in tax rates. This ensures accuracy for tax rates that have more than two digits after the decimal point. For example, tax legislation in Canada sets 9.975% as the VAT rate for the Quebec province. If a longer fraction is specified for a tax rate (which is not typical), it will be rounded to 4 decimal places.
- Click Add to finish adding a new tax. The tax rate
Now you can apply the tax to the necessary services or customer groups by including it in taxation rules.
Also, if necessary, you can add different tax rates for different periods.