Taxes #
Neo-Ledger automatically calculates and posts tax on your transactions — but it needs to know which rates apply. Go to System → Taxes to configure the tax rates for your dataset.
How taxes work in Neo-Ledger #
Tax rates in Neo-Ledger are linked to Chart of Accounts entries. An account must first exist in your chart (with the appropriate Tax link assigned) before it can appear in the tax configuration. This means:
- Create the tax account in your Chart of Accounts with the Tax link.
- Configure the rate and other details on the Taxes page.
The Taxes table #
Each row in the tax table represents one rate configuration. Use these fields to set up each rate:
| Column | Description |
|---|---|
| Account | The ledger account number linked to this tax. |
| Description | The account/tax description. |
| Closed | Check to deactivate this tax rate. A closed tax rate will not be offered on new transactions. |
| Rate | The tax rate as a decimal (e.g. 0.077 for 7.7%, 0.20 for 20%). |
| Tax Number | Your business’s tax registration number associated with this rate (printed on documents). |
| Valid To | An optional expiry date. If set, this rate applies only up to and including this date. |
Tax rate validity periods #
Setting a Valid To date on a tax rate row allows you to handle rate changes over time. When a valid-to date is saved for a rate, the system automatically creates an additional row for the same account without a valid-to date — this represents the current (ongoing) rate.
This means a single tax account can have multiple rows:
| Account | Rate | Valid To |
|---|---|---|
| 2200 — VAT | 0.077 | 2023-12-31 |
| 2200 — VAT | 0.081 | (current) |
When a transaction is posted, the system applies the rate that was valid on the transaction date.
Saving #
Click Save after making any changes to the tax table. All changes are applied at once.
Using taxes on transactions #
Once configured, tax accounts appear in the Tax dropdowns on sales invoices, vendor invoices, and other tax-applicable documents. The system calculates and posts the tax amount to the linked account automatically.
If you enabled Line Tax in Defaults → Settings, tax is calculated per line item. Otherwise it is calculated on the invoice total.