Purchase Taxes and Charges Template

A Purchase Taxes and Charges Template defines the tax structure applied to purchase transactions. It specifies which input taxes are recorded when you buy from suppliers.

Creating a Purchase Tax Template

1. Go to Accounting > Purchase Taxes and Charges Template and click New.
2. Enter a Title (e.g., "Input VAT 15%", "Zero-Rated Purchase").
3. Select the Company.
4. Check Is Default to make this the default for new purchase transactions.
5. Add tax rows:

- Type: Tax calculation type

- Account Head: The tax account (e.g., VAT Input)

- Rate: Tax percentage (e.g., 15)

- Description: "Input VAT @ 15%"

1. Click Save.

VAT Input vs Output

• VAT Output: Tax you collect from customers on sales (liability to the government).
• VAT Input: Tax you pay to suppliers on purchases (deductible from VAT payable).

Your net VAT payable = VAT Output - VAT Input (subject to reverse charge rules).

Applying to Purchase Transactions

Purchase Tax Templates are applied at:

1. Supplier Level: Default template on the Supplier master
2. Item Level: Through Item Tax Templates
3. Tax Rule Level: Based on supplier tax category
4. Transaction Level: Manually on Purchase Invoice / Purchase Order

Related Topics

• Sales Taxes and Charges Template
• Tax Category
• Tax Rule