Difference between revisions of "Tax Configuration"
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− | <div class="docs-alert-info"><i class="fa fa-question-circle"></i> | + | <div class="docs-alert-info"><i class="fa fa-question-circle"></i>For this feature in WHMCS 7.6 and earlier, [https://docs.whmcs.com/index.php?title=Tax/VAT&redirect=no click here].</div> |
+ | |||
+ | WHMCS can gather necessary taxes when you make sales. | ||
+ | |||
+ | You can access this feature at '''Configuration (<i class="fa fa-wrench" aria-hidden="true"></i>) > System Settings > Tax Configuration''' or, prior to WHMCS 8.0, '''Setup > Payments > Tax Configuration'''. | ||
==Enabling Tax Support== | ==Enabling Tax Support== | ||
− | In order to charge tax | + | In order to charge tax: |
+ | |||
+ | # Enable '''Tax Support'''. | ||
+ | # Click '''Save Changes'''. | ||
+ | # Set the desired settings below. | ||
+ | # Click '''Save Changes''' again. | ||
==General Tax Settings== | ==General Tax Settings== | ||
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===Inclusive/Exclusive Tax=== | ===Inclusive/Exclusive Tax=== | ||
− | By default, tax is exclusive. You need to add tax onto the prices you enter in WHMCS at the rate you entered. The alternative is inclusive tax, in which the prices you enter in WHMCS already include tax. For inclusive tax, WHMCS needs to work backwards to calculate the amount of tax to charge based on the rates you've set | + | By default, tax is exclusive. You need to add tax onto the prices you enter in WHMCS at the rate you entered. The alternative is inclusive tax, in which the prices you enter in WHMCS already include tax. For inclusive tax, WHMCS needs to work backwards to calculate the amount of tax to charge based on the rates you've set. |
*'''Exclusive Tax''' > Tax Amount = Item Price x ( Tax Rate / 100 ) | *'''Exclusive Tax''' > Tax Amount = Item Price x ( Tax Rate / 100 ) | ||
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==Custom Invoice Numbering== | ==Custom Invoice Numbering== | ||
− | <div class="docs-alert-info" | + | |
+ | <div class="docs-alert-info">Custom Invoice Number is part of the EU VAT Addon.</div> | ||
To enable Custom Invoice Numbering, toggle the appropriate switch on '''Tax Configuration''' and click '''Save Changes'''. After you enable it, the configured custom invoice numbering will apply to invoices that you generate from then on. | To enable Custom Invoice Numbering, toggle the appropriate switch on '''Tax Configuration''' and click '''Save Changes'''. After you enable it, the configured custom invoice numbering will apply to invoices that you generate from then on. | ||
===Custom Invoice Numbering Format=== | ===Custom Invoice Numbering Format=== | ||
+ | |||
This is the format of the custom invoice number to apply to the invoices WHMCS generates. The default value of this is <tt>{NUMBER}</tt>, which will contain only the value from '''Next Invoice Number'''. | This is the format of the custom invoice number to apply to the invoices WHMCS generates. The default value of this is <tt>{NUMBER}</tt>, which will contain only the value from '''Next Invoice Number'''. | ||
The field can contain any text in the invoice number that the client will see. You can add more tags to the field, which the system will replace when it generates the invoice. | The field can contain any text in the invoice number that the client will see. You can add more tags to the field, which the system will replace when it generates the invoice. | ||
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===Next Invoice Number=== | ===Next Invoice Number=== | ||
+ | |||
The number that the system will assign to the next invoice it generates. | The number that the system will assign to the next invoice it generates. | ||
− | <div class="docs-alert-info" | + | <div class="docs-alert-info">Only fill in this field if you want to change the number of the next invoice. Only increase this number; do not decrease it.</div> |
===Auto Reset Numbering=== | ===Auto Reset Numbering=== | ||
− | This allows you to automatically reset the invoice number periodically. The automatic invoice numbering reset occurs when the automation cron runs on the last day of the month or year. If you want to use this feature, we recommend that you configure the cron job to run late at night in '''Configuration (<i class="fa fa-wrench" aria-hidden="true"></i>) > System Settings > Automation Settings'''. | + | This allows you to automatically reset the invoice number periodically. The automatic invoice numbering reset occurs when the automation cron runs on the last day of the month or year. If you want to use this feature, we recommend that you configure the cron job to run late at night in '''Configuration (<i class="fa fa-wrench" aria-hidden="true"></i>) > System Settings > [[Automation Settings]]''' or, prior to WHMCS 8.0, '''Setup > Automation Settings'''. |
==VAT Settings== | ==VAT Settings== | ||
===VAT Mode=== | ===VAT Mode=== | ||
+ | |||
Toggle '''VAT Mode''' to ''ON''. This will automatically display a window allowing you to set your VAT label display name. Enter one and then click '''Create Rules'''. | Toggle '''VAT Mode''' to ''ON''. This will automatically display a window allowing you to set your VAT label display name. Enter one and then click '''Create Rules'''. | ||
====Auto Configure VAT Tax Rules==== | ====Auto Configure VAT Tax Rules==== | ||
+ | |||
If you accidentally delete a rule or need to recreate or change the name of a rule, click here. Follow the prompts, using the appropriate VAT Rate for each EU country. | If you accidentally delete a rule or need to recreate or change the name of a rule, click here. Follow the prompts, using the appropriate VAT Rate for each EU country. | ||
===Custom Field Migration=== | ===Custom Field Migration=== | ||
+ | |||
If a WHMCS installation previously used the EU VAT Addon and a custom field to contain the client VAT Number, this option will display to perform a migration of the tax numbers from the custom field to store them in the client table. | If a WHMCS installation previously used the EU VAT Addon and a custom field to contain the client VAT Number, this option will display to perform a migration of the tax numbers from the custom field to store them in the client table. | ||
===VAT Number Validation=== | ===VAT Number Validation=== | ||
+ | |||
Toggle this to ''ON'' to enable validation of VAT numbers during registration and checkout. WHMCS uses VIES to validate EU VAT numbers and HMRC to validate UK VAT numbers. | Toggle this to ''ON'' to enable validation of VAT numbers during registration and checkout. WHMCS uses VIES to validate EU VAT numbers and HMRC to validate UK VAT numbers. | ||
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===Auto Tax Exempt=== | ===Auto Tax Exempt=== | ||
+ | |||
Check this to set clients as tax exempt when their VAT number successfully validates. | Check this to set clients as tax exempt when their VAT number successfully validates. | ||
− | + | ||
+ | When you save a client's profile, WHMCS will revalidate their VAT number with the relevant authority (VIES for EU VAT numbers and HMRC for UK VAT numbers). If the VAT number is invalid, the client will lose their tax exempt status, and the system will apply tax to all newly-generated invoices accordingly. | ||
+ | |||
===Your Home Country=== | ===Your Home Country=== | ||
+ | |||
Select the country for your main business location. | Select the country for your main business location. | ||
===Home Country Exclusion=== | ===Home Country Exclusion=== | ||
+ | |||
Check this to always charge VAT if the customer's billing address is in the country you selected above. | Check this to always charge VAT if the customer's billing address is in the country you selected above. | ||
===Proforma Invoicing/Sequential Paid Invoice Numbering=== | ===Proforma Invoicing/Sequential Paid Invoice Numbering=== | ||
+ | |||
Toggle this to ''ON'' to enable the invoice numbering format you set below. | Toggle this to ''ON'' to enable the invoice numbering format you set below. | ||
===Sequential Invoice Number Format=== | ===Sequential Invoice Number Format=== | ||
+ | |||
Enter a format for invoice numbering. You can include these tags, which will be replaced with the corresponding information when the invoice is generated: | Enter a format for invoice numbering. You can include these tags, which will be replaced with the corresponding information when the invoice is generated: | ||
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===Next Paid Invoice Number=== | ===Next Paid Invoice Number=== | ||
+ | |||
Enter a number to use to number the next invoice that WHMCS generates. | Enter a number to use to number the next invoice that WHMCS generates. | ||
===Auto Reset Numbering=== | ===Auto Reset Numbering=== | ||
+ | |||
Select the frequency with which WHMCS should automatically reset invoice numbering. Select ''Never'' if you do not want to automatically reset numbering. | Select the frequency with which WHMCS should automatically reset invoice numbering. Select ''Never'' if you do not want to automatically reset numbering. | ||
===Set Invoice Date on Payment=== | ===Set Invoice Date on Payment=== | ||
+ | |||
Check this to set the invoice date to the current date when payment is applied. | Check this to set the invoice date to the current date when payment is applied. | ||
==Tax Rules== | ==Tax Rules== | ||
− | You must configure tax rules in order to automatically charge tax in the cart. You can view and add tax rules | + | |
+ | You must configure tax rules in order to automatically charge tax in the cart. You can view and add tax rules in the '''Tax Rules''' tab. | ||
===Adding a Rule=== | ===Adding a Rule=== | ||
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For example, a UK business would set up the system to charge VAT. In the country field, you would choose '''United Kingdom''' and for the state you would choose '''Apply Rule to All States'''. You would then enter the tax rate of '''20.0''' and click '''Add Rule'''. You can set up an unlimited number of tax rules. | For example, a UK business would set up the system to charge VAT. In the country field, you would choose '''United Kingdom''' and for the state you would choose '''Apply Rule to All States'''. You would then enter the tax rate of '''20.0''' and click '''Add Rule'''. You can set up an unlimited number of tax rules. | ||
+ | |||
+ | ===Changing Tax Rates=== | ||
+ | |||
+ | Sales tax rates generally change over time. To change a tax rate in WHMCS, delete the existing rule and then create a new rule using the new rate and exactly the same name, country, and state. | ||
+ | |||
+ | For more information, see [https://help.whmcs.com/m/payments/l/1271960-changing-tax-rates Changing Tax Rates]. | ||
===Supported Values=== | ===Supported Values=== | ||
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==Advanced Rules== | ==Advanced Rules== | ||
+ | |||
===Setting Taxed Items=== | ===Setting Taxed Items=== | ||
+ | |||
The flexible tax system in WHMCS allows you to set, individually, which items apply for tax. WHMCS sets products as untaxed by default. Even if you have tax rules set up, the system won't charge tax for it. This allows you to, for example, charge tax on the products you offer but not on services. | The flexible tax system in WHMCS allows you to set, individually, which items apply for tax. WHMCS sets products as untaxed by default. Even if you have tax rules set up, the system won't charge tax for it. This allows you to, for example, charge tax on the products you offer but not on services. | ||
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To do this: | To do this: | ||
− | #Go to '''Configuration (<i class="fa fa-wrench" aria-hidden="true"></i>) > System Settings > Products/Services > Products/Services'''. | + | #Go to '''Configuration (<i class="fa fa-wrench" aria-hidden="true"></i>) > System Settings > [[Products and Services|Products/Services]]''' or, prior to WHMCS 8.0, '''Setup > Products/Services > Products/Services'''. |
#Click the edit icon next to the product you wish to set to be taxable. | #Click the edit icon next to the product you wish to set to be taxable. | ||
#Check the checkbox next to the item labelled '''Tax Product'''. | #Check the checkbox next to the item labelled '''Tax Product'''. | ||
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====Setting Domains as Taxable==== | ====Setting Domains as Taxable==== | ||
− | You can set whether to apply taxes to domains | + | You can set whether to apply taxes to domains. |
====Setting Billable Items as Taxable==== | ====Setting Billable Items as Taxable==== | ||
− | You can set whether to apply tax to billable items | + | You can set whether to apply tax to billable items. |
====Setting Late Fees as Taxable==== | ====Setting Late Fees as Taxable==== | ||
− | You can set whether to apply tax to late fees on invoices | + | You can set whether to apply tax to late fees on invoices. |
====Setting Custom Invoices as Taxable==== | ====Setting Custom Invoices as Taxable==== | ||
− | You can set whether to apply tax to custom (manually created) invoices | + | You can set whether to apply tax to custom (manually created) invoices. |
===Compound Tax=== | ===Compound Tax=== | ||
+ | |||
The system calculates compound tax after and on top of a primary tax. If you need to add the Level 2 tax to the Level 1 tax, toggle this option on the advanced tab. | The system calculates compound tax after and on top of a primary tax. If you need to add the Level 2 tax to the Level 1 tax, toggle this option on the advanced tab. | ||
===Deduct Tax Amount=== | ===Deduct Tax Amount=== | ||
− | If the '''Tax Type''' is ''Inclusive'' and the client's country and state or province selections result in them not meeting any of the configured tax rules, deduct an amount from the order. Base this on the total amount for taxable items on the order and the percentage of tax that would apply to the default country in the '''Configuration (<i class="fa fa-wrench" aria-hidden="true"></i>) > System Settings > General Settings > | + | |
+ | If the '''Tax Type''' is ''Inclusive'' and the client's country and state or province selections result in them not meeting any of the configured tax rules, deduct an amount from the order. Base this on the total amount for taxable items on the order and the percentage of tax that would apply to the default country in the '''[[Localisation Tab|Localisation]]''' tab at '''Configuration (<i class="fa fa-wrench" aria-hidden="true"></i>) > System Settings > General Settings''' or, prior to WHMCS 8.0, '''Setup > General Settings'''. It will deduct the percentage that applies to the first applicable Level 1 and Level 2 tax rules. | ||
===Tax Calculation Mode=== | ===Tax Calculation Mode=== | ||
+ | |||
The '''Calculation Mode''' setting determines how the system calculates taxes. | The '''Calculation Mode''' setting determines how the system calculates taxes. | ||
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There are two possible values for this setting: | There are two possible values for this setting: | ||
− | * '''Calculate individually per line item''' — Selecting this option will calculate taxes on a per line item basis. When you select this, the system will calculate tax for each line item, rounded to 2 decimal places. It will also calculate the total tax using the sum of the tax calculation for each individual line item. | + | * '''Calculate individually per line item''' — Selecting this option will calculate taxes on a per line item basis. When you select this, the system will calculate tax for each line item, rounded to 2 decimal places. It will also calculate the total tax using the sum of the tax calculation for each individual line item. |
− | * '''Calculate based on collective sum of the taxable line items''' — Selecting this option will calculate taxes using the sum of the taxable line items on an invoice. When you select this, the system totals the individual taxable line items and calculates tax based on the sum total of those taxable line items.<div class="docs- | + | * '''Calculate based on collective sum of the taxable line items''' — Selecting this option will calculate taxes using the sum of the taxable line items on an invoice. When you select this, the system totals the individual taxable line items and calculates tax based on the sum total of those taxable line items. |
+ | |||
+ | ====Tax Amount Differences==== | ||
+ | Due to rounding for tax calculation modes and the calculation amounts, the resulting tax amounts may differ. | ||
+ | |||
+ | =====Calculate Individually per Line Item===== | ||
+ | |||
+ | Example tax calculation for 11 line items at $2.21 each: | ||
+ | |||
+ | <div class="docs-related-pages"> | ||
+ | (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) + (2.21 x 20%) = 4.84 | ||
+ | </div> | ||
+ | |||
+ | =====Calculate Based on the Collective Sum of the Taxable Line Items===== | ||
+ | |||
+ | Example tax calculation for 11 line items at $2.21 each: | ||
+ | |||
+ | <div class="docs-related-pages"> | ||
+ | (24.31 x 20%) = 4.86 | ||
+ | </div> |
Latest revision as of 14:18, 22 December 2023
WHMCS can gather necessary taxes when you make sales.
You can access this feature at Configuration () > System Settings > Tax Configuration or, prior to WHMCS 8.0, Setup > Payments > Tax Configuration.
Contents
- 1 Enabling Tax Support
- 2 General Tax Settings
- 3 Custom Invoice Numbering
- 4 VAT Settings
- 4.1 VAT Mode
- 4.2 Custom Field Migration
- 4.3 VAT Number Validation
- 4.4 Auto Tax Exempt
- 4.5 Your Home Country
- 4.6 Home Country Exclusion
- 4.7 Proforma Invoicing/Sequential Paid Invoice Numbering
- 4.8 Sequential Invoice Number Format
- 4.9 Next Paid Invoice Number
- 4.10 Auto Reset Numbering
- 4.11 Set Invoice Date on Payment
- 5 Tax Rules
- 6 Advanced Rules
Enabling Tax Support
In order to charge tax:
- Enable Tax Support.
- Click Save Changes.
- Set the desired settings below.
- Click Save Changes again.
General Tax Settings
Tax/VAT ID Number
Enter your company Tax/VAT ID in this field. Invoices will display this under the company address in the client area and on PDF printable invoices.
Inclusive/Exclusive Tax
By default, tax is exclusive. You need to add tax onto the prices you enter in WHMCS at the rate you entered. The alternative is inclusive tax, in which the prices you enter in WHMCS already include tax. For inclusive tax, WHMCS needs to work backwards to calculate the amount of tax to charge based on the rates you've set.
- Exclusive Tax > Tax Amount = Item Price x ( Tax Rate / 100 )
- Inclusive Tax > Tax Amount = ( Item Price / ( 100 + Tax Rate ) ) x Tax Rate
Custom Invoice Numbering
To enable Custom Invoice Numbering, toggle the appropriate switch on Tax Configuration and click Save Changes. After you enable it, the configured custom invoice numbering will apply to invoices that you generate from then on.
Custom Invoice Numbering Format
This is the format of the custom invoice number to apply to the invoices WHMCS generates. The default value of this is {NUMBER}, which will contain only the value from Next Invoice Number. The field can contain any text in the invoice number that the client will see. You can add more tags to the field, which the system will replace when it generates the invoice.
Available tags are:
- {NUMBER} — The value for Next Invoice Number.
- {YEAR} — The four-digit year value for the current date.
- {MONTH} — The two-digit month value for the current date.
- {DAY} — The two-digit day value for the current date.
Next Invoice Number
The number that the system will assign to the next invoice it generates.
Auto Reset Numbering
This allows you to automatically reset the invoice number periodically. The automatic invoice numbering reset occurs when the automation cron runs on the last day of the month or year. If you want to use this feature, we recommend that you configure the cron job to run late at night in Configuration () > System Settings > Automation Settings or, prior to WHMCS 8.0, Setup > Automation Settings.
VAT Settings
VAT Mode
Toggle VAT Mode to ON. This will automatically display a window allowing you to set your VAT label display name. Enter one and then click Create Rules.
Auto Configure VAT Tax Rules
If you accidentally delete a rule or need to recreate or change the name of a rule, click here. Follow the prompts, using the appropriate VAT Rate for each EU country.
Custom Field Migration
If a WHMCS installation previously used the EU VAT Addon and a custom field to contain the client VAT Number, this option will display to perform a migration of the tax numbers from the custom field to store them in the client table.
VAT Number Validation
Toggle this to ON to enable validation of VAT numbers during registration and checkout. WHMCS uses VIES to validate EU VAT numbers and HMRC to validate UK VAT numbers.
Auto Tax Exempt
Check this to set clients as tax exempt when their VAT number successfully validates.
When you save a client's profile, WHMCS will revalidate their VAT number with the relevant authority (VIES for EU VAT numbers and HMRC for UK VAT numbers). If the VAT number is invalid, the client will lose their tax exempt status, and the system will apply tax to all newly-generated invoices accordingly.
Your Home Country
Select the country for your main business location.
Home Country Exclusion
Check this to always charge VAT if the customer's billing address is in the country you selected above.
Proforma Invoicing/Sequential Paid Invoice Numbering
Toggle this to ON to enable the invoice numbering format you set below.
Sequential Invoice Number Format
Enter a format for invoice numbering. You can include these tags, which will be replaced with the corresponding information when the invoice is generated:
- {YEAR} — The current year.
- {MONTH} — The current month.
- {DAY} — The current day.
- {NUMBER} — The sequential invoice number.
Next Paid Invoice Number
Enter a number to use to number the next invoice that WHMCS generates.
Auto Reset Numbering
Select the frequency with which WHMCS should automatically reset invoice numbering. Select Never if you do not want to automatically reset numbering.
Set Invoice Date on Payment
Check this to set the invoice date to the current date when payment is applied.
Tax Rules
You must configure tax rules in order to automatically charge tax in the cart. You can view and add tax rules in the Tax Rules tab.
Adding a Rule
To add a rule:
- For Name, enter a name for the tax zone, which allows you to identify it.
- For Country, choose whether this tax rate applies to all countries or only applies to a selected country.
- For the state, choose whether it applies to all states in the selected country or only a selected state.
- Finally, enter the tax rate as a percentage (for example, 17.5).
- Click Add Rule. The system will create the tax rule and automatically add it to the appropriate table for Level 1 or Level 2 rules.
For example, a UK business would set up the system to charge VAT. In the country field, you would choose United Kingdom and for the state you would choose Apply Rule to All States. You would then enter the tax rate of 20.0 and click Add Rule. You can set up an unlimited number of tax rules.
Changing Tax Rates
Sales tax rates generally change over time. To change a tax rate in WHMCS, delete the existing rule and then create a new rule using the new rate and exactly the same name, country, and state.
For more information, see Changing Tax Rates.
Supported Values
WHMCS 8.0 and later supports tax rates with up to three decimal places and currency values up to 99 trillion.
Prior to WHMCS 8.0, WHMCS only supported tax rates with up to two decimal places.
Advanced Rules
Setting Taxed Items
The flexible tax system in WHMCS allows you to set, individually, which items apply for tax. WHMCS sets products as untaxed by default. Even if you have tax rules set up, the system won't charge tax for it. This allows you to, for example, charge tax on the products you offer but not on services.
Setting a Product/Service as Taxable
To do this:
- Go to Configuration () > System Settings > Products/Services or, prior to WHMCS 8.0, Setup > Products/Services > Products/Services.
- Click the edit icon next to the product you wish to set to be taxable.
- Check the checkbox next to the item labelled Tax Product.
- Save your changes to the product.
Setting Domains as Taxable
You can set whether to apply taxes to domains.
Setting Billable Items as Taxable
You can set whether to apply tax to billable items.
Setting Late Fees as Taxable
You can set whether to apply tax to late fees on invoices.
Setting Custom Invoices as Taxable
You can set whether to apply tax to custom (manually created) invoices.
Compound Tax
The system calculates compound tax after and on top of a primary tax. If you need to add the Level 2 tax to the Level 1 tax, toggle this option on the advanced tab.
Deduct Tax Amount
If the Tax Type is Inclusive and the client's country and state or province selections result in them not meeting any of the configured tax rules, deduct an amount from the order. Base this on the total amount for taxable items on the order and the percentage of tax that would apply to the default country in the Localisation tab at Configuration () > System Settings > General Settings or, prior to WHMCS 8.0, Setup > General Settings. It will deduct the percentage that applies to the first applicable Level 1 and Level 2 tax rules.
Tax Calculation Mode
The Calculation Mode setting determines how the system calculates taxes.
There are two possible values for this setting:
- Calculate individually per line item — Selecting this option will calculate taxes on a per line item basis. When you select this, the system will calculate tax for each line item, rounded to 2 decimal places. It will also calculate the total tax using the sum of the tax calculation for each individual line item.
- Calculate based on collective sum of the taxable line items — Selecting this option will calculate taxes using the sum of the taxable line items on an invoice. When you select this, the system totals the individual taxable line items and calculates tax based on the sum total of those taxable line items.
Tax Amount Differences
Due to rounding for tax calculation modes and the calculation amounts, the resulting tax amounts may differ.
Calculate Individually per Line Item
Example tax calculation for 11 line items at $2.21 each:
Calculate Based on the Collective Sum of the Taxable Line Items
Example tax calculation for 11 line items at $2.21 each: