Step 6: Tax Details
Enter any three types of taxes which you regularly pay. This wizard will create a tax master which will calculate the taxes as per the tax-type.
Just set the tax name and the standard percentage levied.
Some examples of tax types are given below.
A value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or a service. From an accounting point of view, by the stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs.
The purpose of VAT is to generate tax revenues to the government similar to the corporate income tax or the personal income tax. For Example: When you shop at a departmental store and avail discount on the products, the store charges you 5% extra on the total bill as the VAT.
To setup VAT in the setup wizard , simply enter the percentage amount levied by your government. To setup VAT at a later stage read setting-up-taxes
Next: Step 7: Customers