Sales tax groups
Sales tax groups represent the tax profile of the entity you are transacting with—typically your Customers and Vendors. By assigning a Sales tax group to a master data record, you define the potential taxes applicable to that specific party based on their geographical location, tax registration status, or nature of business.
Creating a Sales tax group
To configure an entity tax group, navigate to Tax > Setup > Sales tax > Sales tax groups.
Create a new group by defining its primary identifiers:
- Code: A concise, alphanumeric identifier (e.g.,
RETAIL_STD,EXPORT,EXEMPT_SUPPLY). - Description: A comprehensive explanation of the group's intent (e.g.,
Standard Retail Sales Tax Group).
Assigning Tax Codes
The core function of a Sales tax group is to act as a container for one or more Sales tax codes.
Within the Tax codes accordion, use the + Add tax code button to attach the relevant mathematical codes that could apply to this entity.
- For a standard domestic customer, you might attach standard rate codes (e.g.,
STD_5). - For an international customer, you might attach zero-rated or export codes (e.g.,
EXPORT_0).
Attaching a tax code to a Sales tax group does not guarantee it will be calculated on a transaction. The ERP Tax Engine only calculates a tax if the specific tax code exists in both the Sales tax group (Customer/Vendor) and the Item sales tax group (Product). This is known as the Intersection Logic.
Next Steps
With the entity side of the tax equation complete, you must now define the product side. Proceed to the Item sales tax groups documentation.