Taxes

Acusheet lets you create and manage multiple tax rates that can be applied to invoice and bill line items. Tax is calculated automatically when selected and posted to the correct accounts.

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How to Access Tax Settings

Go to Settings → Taxes

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Default Taxes

When you create a company, Acusheet automatically creates tax rates based on your country:

• UAE: VAT (5%) and VAT (0%) are created automatically

If your country doesn't have a default, you'll start with no tax rates and can add them manually.

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Adding a Tax Rate

1. Go to Settings → Taxes
2. Click New Tax
3. Fill in the details:

Field	Description
Name	Descriptive name — e.g. "VAT (5%)", "GST (10%)", "Exempt (0%)"
Rate	The percentage value — e.g. 5 for 5%

4. Click Save

When a tax is created, Acusheet automatically creates a corresponding account under "Tax and Duty" in your Chart of Accounts.

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Editing a Tax Rate

1. Click ⋮ → Edit on the tax row
2. Update the name or rate
3. Save

The linked account in the Chart of Accounts is renamed automatically.

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Deleting a Tax Rate

1. Click ⋮ → Delete
2. Confirm

Tax rates that have been used on transactions cannot be deleted. Rename or deactivate them instead.

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Applying Taxes to Documents

When creating an invoice or bill, each line item has a Tax dropdown. Select the applicable tax rate for that line item. Tax is:

• Calculated as a percentage of the line item amount (after discount)
• Added to the document subtotal
• Posted to the corresponding tax account in your Chart of Accounts

You can apply different tax rates to different line items on the same document.

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Tax in Reports

All taxes posted through invoices and bills are tracked in your accounts. Run the Tax Report to see:

• Total output tax collected (on invoices)
• Total input tax paid (on bills)
• Net tax payable

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Frequently Asked Questions

Can I apply zero-rated and exempt tax differently?
Yes — create separate tax rates (e.g. "VAT (0%) - Zero Rated" and "VAT (0%) - Exempt") with a 0% value. They'll book to different accounts if set up accordingly, which helps with VAT return reporting.

Can I have tax-inclusive pricing?
Not currently. All rates are applied as exclusive tax (added on top of the line item amount).

Can I apply multiple taxes to one line item?
Each line item can have one tax rate. For complex tax scenarios, create a combined tax rate (e.g. "GST + PST (13%)") as a single entry.

Where does the tax money go in my accounts?
Output tax (on invoices) goes into a Tax and Duty liability account. Input tax (on bills) is recorded as an offset. The net balance in the tax account is what you owe the government.