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 Billing, there are country specific taxes, multiple tax rates, and tax groups that you can configure according to your business’s needs.

Tax Settings

Zoho Billing lets you record your organization’s VAT registration details and enable TDS to associate with your customers.

Enable Tax

If your business is registered for VAT, you can enter your registration details in Zoho Billing.

To enable tax:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select Tax Settings.
Select Yes under Is your business registered for VAT?
Enter the details in the following fields:

Field	Description
VAT Registration Number Label	Enter a label for your VAT registration number.
VAT Registration Number (RFC)	Enter your business’s tax identification number.
Business Legal Name	Enter your business’s legal name.
VAT Registered On	Select the date your business was registered for VAT.
Tax Regime	Select your business’s applicable regime from the dropdown.

Click Save.

TDS

TDS, or Tax Deducted at Source, can be associated with your customers in Zoho Billing.

Enable TDS

To enable TDS:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select Tax Settings.
Mark Enable TDS under TDS.
Click Save.

You can now enable TDS for a particular customer from the New Customer or Edit Customer page.

Tax Rates

You can create, edit, and delete the tax rates applicable to your business, and group multiple tax rates together to apply them to your transactions.

Adding New Taxes

To create or add a new Tax, follow steps as below:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select Tax Rates.
Click + New Tax.
Provide a Tax Name.
Enter the relevant Rate in percentage.
Enable This tax is a compound tax, if your newly created tax is going to be a compound tax.
Click Save.
Insight: Compound Tax - In some countries you might have to collect more than one tax from your customers. It is for you to pay to your local province and another to the federal authority. In certain 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.

Editing Taxes

To edit an existing tax, follow the steps below:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select Tax Rates.
Hover over the tax that you want to edit.
Click the dropdown and select Edit.
Make the necessary changes.
Click Save.
If this tax has already been applied in some transactions, you will asked to confirm if you wish to update the new tax rate in those transactions as well.

Deleting Taxes

To delete an existing tax follow steps as below:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select Tax Rates.
Hover over the tax that you want to edit.
Click the dropdown and select Delete.
Click Ok to confirm.

Adding a New Tax Group

You can group more than two taxes together and apply it on your transactions. Let’s say you have to charge your customers a newly introduced cess rate, you can then create a tax group with your regular tax rate and the cess to apply them on your invoices.

The total tax rate of a tax group will be the sum of all the tax rates which are grouped under it. To create a tax group, you must ensure you have created two or more tax rates.

To create a new tax group:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select Tax Rates
Click the dropdown next to + New Tax and select New Tax Group.
Enter the name of the tax group, and select the taxes you want to associate with this tax group.
Click Save.

TDS Rates

Once you’ve enabled TDS for your organization, you can create, edit, and delete the TDS rates applicable to your business, and group multiple TDS rates together to apply them to your transactions.

Note: The TDS Rates pane is available only after you enable TDS under Tax Settings.

Adding New TDS

To create or add a new TDS rate, follow steps as below:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select TDS Rates.
Click + New Rate.
Provide a TDS Name.
Enter the relevant TDS Rate in percentage.
Select the Tax Type from the dropdown.
Click Save.

Editing TDS

To edit an existing TDS rate, follow the steps below:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select TDS Rates.
Hover over the TDS rate that you want to edit.
Click the dropdown and select Edit.
Make the necessary changes.
Click Save.
If this TDS rate has already been applied in some transactions, you will be asked to confirm if you wish to update the new rate in those transactions as well.

Deleting TDS

To delete an existing TDS rate, follow steps as below:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select TDS Rates.
Hover over the TDS rate that you want to delete.
Click the dropdown and select Delete.
Click Ok to confirm.

Adding a New TDS Group Tax

You can group more than two TDS rates together and apply them on your transactions.

The total TDS rate of a TDS group tax will be the sum of all the TDS rates which are grouped under it. To create a TDS group tax, you must ensure you have created two or more TDS rates.

To create a new TDS group:

Go to Settings.
Select Taxes under Taxes & Compliance in the Organization Settings pane.
In the Taxes pane, select TDS Rates.
Click + TDS Group Tax.
Enter the name of the TDS group, and select the TDS rates you want to associate with this TDS group.
Click Save.

Was this document helpful?

Yes