Taxes

Taxes are an integral part of any business. The taxes applicable to your business are determined by your business’s location and type. In Zoho Procurement, there are country specific taxes, multiple tax rates, and tax groups that you can configure according to your business’s needs.

Tax Rates

In this section, you can create the tax rates that are applicable for your business based on the goods and services that your business deals with.

Add Tax Rates

To create new tax rates:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Click + New Tax in the top right corner.
Fill in the Tax Name and the Rate (%) at which tax is levied.
Mark the option This tax is a compound tax, if this is a tax that is calculated on top of a primary tax. The Compound Tax label will be added next to this tax.

Insight:
What is Compound Tax?
In some countries, you might have to collect more than one tax from your customers. One tax could be for you to pay to your local province and another to a different tax authority, say, federal authority. In such cases, the provincial tax is applied on the total that includes the item or invoice amount as well as the federal tax amount. Such taxes are called as Compound Taxes.

Click Save.

The tax will be created and you can apply it to items and transactions.

Import Tax Rates

If you’ve created tax rates outside your organization, you can import them into your Zoho Procurement organization. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Click the More icon in the top right corner and select Import Taxes.
Click Choose File and select the file you want to import. Or, drag and drop the file you want to import.

Pro Tip: To know the format of the import file, including the necessary columns and data, you can download the sample file and ensure that your import file matches it.

If you want to upload another file instead of the selected file, click Replace File and choose another file.
Select the Character Encoding and File Delimiter.
Click Next.
The best match for each field in Zoho Procurement will be auto-mapped with the fields in the imported file. If there are unmapped fields, you can map them manually.
If you want to save the mapping for future use, mark the Save these selections for use during future imports option.
Click Next.
The data in the unmapped fields will not be imported into Zoho Procurement. If you want to map those fields, click Previous and map the unmapped fields.
Once you have mapped all the relevant fields, click Import.

Apply Tax to Items

After creating tax rates, you can set a default tax rate for the items in your Zoho Procurement organization. Once done, when you create transactions for these items, their configured tax rates will be populated automatically.

To configure the tax rates for items:

Go to Items on the left sidebar.
If you’re creating a new item, click + New in the rop right corner and fill in the required details.
If you want to apply the tax rate to an existing item, select the item and click the Edit icon.
Click the dropdown next to Tax and select the required tax rate.
Click Save.

Apply Tax to Transactions

After creating tax rates, you can apply the applicable tax for the items in transactions. Here’s how:

Go to required module on the left sidebar.
If you’re creating a new transaction, click + New in the rop right corner and fill in the required details.
If you want to apply tax to an existing transaction, select the required transaction and click Edit.
In the Item Table section, click the Tax dropdown next to the items and select the applicable tax rates for them.
Click Save.

View Associated Records

Once you’ve applied Tax rates to transactions, you can view the records associated the Tax rates. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Hover over the required Tax rate and click the Dropdown icon.
Select View Associate Records from the dropdown. A pane will appear on the right side where you can view the records associated with the Tax rate.

Edit Tax Rates

You can make changes to the Tax rates in your organization. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Hover over the required Tax rate and click the Dropdown icon.
Select Edit from the dropdown.
Make the necessary changes and click Save.
If this tax has already been applied in some transactions, you will be asked to confirm if you wish to update the new Tax rate in those transactions as well.

Mark Tax Rates as Default

You can mark a Tax rate as default when it’s the primary rate applicable to your transactions. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Hover over the required Tax rate and click the Dropdown icon.
Select Mark as Default from the dropdown. The Tax rate will be set as the default and automatically associated with vendors for whom you’ve enabled Tax. The Default tag will be added to the Tax rate.

Mark Tax Rates as Inactive

If your business doesn’t require certain Tax rates temporarily, you can mark them as inactive instead of deleting them. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Hover over the required Tax rate and click the Dropdown icon.
Select Mark as Inactive from the dropdown. The Tax rate will be marked as inactive, and you won’t be able to use it in transactions.

Mark Tax Rates as Active

If your business requires Tax rates that were previously marked as inactive, here’s how you can enable them again:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Click the filter dropdown at the top and select Inactive.
Hover over the required Tax rate and click the Dropdown icon.
Select Mark as Active from the dropdown. The Tax rate will be marked as active, and you can use it in transactions now.

Export Tax Rates

You can export the tax rates from your Zoho Procurement organization for use in accounting or other systems. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Click the More icon in the top right corner and select Export Taxes.
Select an Export Template if you want to export only specific fields in the Tax Rates. If you don’t select any template, all fields will be exported.
Choose the Export File Format. You can choose from CSV, XLS, and XLSV.
Check the Include sensitive Personally Identifiable Information (PII) while exporting option if you want to include Personally Identifiable Information (PII).
Enter the File Protection Password if you want to protect the export file.
Click Export.

Delete Tax Rates

You can delete the tax rates in your organization. Here’s how:

Prerequisite: You cannot delete tax rates that are applied to transactions.

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Hover over the required tax rate and click the Delete icon.
Click OK to confirm.

Create Taxes in Bulk

If your organization uses multiple tax rates, you can create them in bulk instead of creating them individually. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Click the dropdown next to + New Tax in the top right corner and select Create Taxes in Bulk.
Enter the Tax Name and Rate (%).
Click + Add Tax to add more taxes.
Check These taxes are compound taxes if the taxes added are calculated on top of a primary tax. The Compound Tax label will be added next to these tax rates.
Click Save.

Tax Groups

You can group multiple taxes together and apply them to your purchases. Let’s say you need to pay a newly introduced cess rate; you can create a tax group that includes your regular tax rate and the cess to apply them to your bills.

The total tax rate of a tax group will be the sum of all the tax rates that are grouped under it. To create a tax group, ensure that there are at least two tax rates in your organization.

To create a new tax group:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Click the dropdown next to + New Tax in the top right corner and select New Tax Group.
Enter the Tax Group Name, and select the tax rates you want to associate with this tax group in the Associate Tax Rates section.
Click Save. To edit, view associated records, mark as active or inactive, set as default, and delete tax groups, follow the same process as you would for individual Tax rates.

Import Tax Groups

If you’ve created tax groups outside your organization, you can import them into your Zoho Procurement organization. Here’s how:

Go to Settings in the top right corner of the page.
Select Taxes under Taxes & Compliance.
In the Taxes pane, select Tax Rates.
Click the More icon in the top right corner and select Import Tax Groups.
Click Choose File and select the file you want to import. Or, drag and drop the file you want to import.