Custom Tax Profiles

Overview

Custom tax profiles allow you to manually configure tax rules for different jurisdictions. This is useful when TaxJar is not available or you need custom tax logic.

Creating a Tax Profile

Step 1: Navigate to Tax Profiles

1. Go to Settings → Tax
2. Click Tax Profiles
3. Click New Tax Profile

Step 2: Basic Information

Fill in profile details:

• Profile Name - Descriptive name (e.g., "Canada - Ontario")
• Country - Select country
• Region - Select region/state/province
• Description - Optional description

Step 3: Add Tax Rules

Add tax rules for this jurisdiction:

1. Click Add Tax Rule
2. Enter:
   • Tax Name - Name of tax (e.g., "GST", "PST", "VAT")
   • Tax Rate - Percentage (e.g., 5 for 5%)
   • Authority Type - Federal, State, Provincial, VAT, Local
3. Save rule

Step 4: Add Multiple Rules

Add multiple tax rules if needed:

• GST + PST - Multiple taxes (Canada)
• VAT + Local Tax - Combined taxes (EU)
• State + City Tax - Multiple levels (US)

Step 5: Save Profile

Click Save to create the tax profile.

Tax Profile Presets

OpenInvoice includes presets for common regions:

Canada

• GST - 5% federal tax
• PST - Provincial tax (varies by province)
• QST/TVQ - Quebec tax (9.975%)

United States

• State tax templates
• Common state tax rates
• Local tax support

European Union

• VAT templates
• Country-specific rates
• EU-wide support

United Kingdom

• VAT templates
• Standard and reduced rates

Australia

• GST templates
• Standard GST rate

India

• GST templates
• Multiple tax components

Using Tax Profiles

Setting Default Profile

Set default tax profile for organization:

1. Go to Settings → Tax
2. Select Default Tax Profile
3. Save

Default profile is used when:

• No TaxJar calculation available
• No tax override specified
• Creating new invoices

Applying to Invoices

Tax profiles can be applied:

• Per Invoice - Select profile when creating invoice
• Per Customer - Set default profile for customer
• Per Product - Set tax profile for product

Tax Rules

Rule Types

• Percentage-Based - Percentage of subtotal
• Fixed Amount - Fixed tax amount
• Compound - Tax on tax (e.g., PST on GST)

Authority Types

Categorize taxes by authority:

• Federal - Federal government tax
• State - State/province tax
• Provincial - Provincial tax
• VAT - Value-added tax
• Local - Local/municipal tax

Tax Calculation

How It Works

1. Select tax profile
2. Calculate tax for each rule
3. Sum all tax amounts
4. Add to invoice subtotal
5. Display tax breakdown

Tax Breakdown Display

Tax breakdown shows:

• Each tax rule
• Tax rate percentage
• Tax amount
• Total tax
• Authority type

Managing Tax Profiles

Editing Profiles

1. Open the tax profile
2. Click Edit
3. Modify rules or details
4. Save

Deleting Profiles

1. Open the tax profile
2. Click Delete
3. Confirm deletion

Note: Cannot delete profile if used by invoices.

Duplicating Profiles

Create similar profiles:

1. Open the profile
2. Click Duplicate
3. Edit as needed
4. Save as new profile

Tax Exemptions

Customer Tax Exemption

Set customers as tax-exempt:

1. Open the customer
2. Enable Tax Exempt
3. Add exemption reason
4. Save

Tax-exempt customers:

• No tax calculated
• Exemption reason shown
• Can override per invoice

Product Tax Exemption

Set products as tax-exempt:

1. Open the product
2. Enable Tax Exempt
3. Save

Tax-exempt products:

• No tax on this product
• Applies to all invoices
• Can override per invoice

Best Practices

1. Use Presets - Start with presets when available
2. Keep Updated - Update rates when tax laws change
3. Test Calculations - Verify tax calculations
4. Document Rules - Add descriptions to profiles
5. Backup TaxJar - Use profiles as fallback

Next Steps

• TaxJar Setup - Automatic tax calculation
• Tax Configuration - Configure tax settings