Tax Codes

Tax codes are the rules that drive automatic tax calculation across every transaction in CifraHQ. Each code belongs to a Tax Authority, carries a specific rate, and controls whether it applies to sales, purchasing, or both. Set them up correctly and CifraHQ handles the arithmetic — so your Invoices and bills always carry the right tax without manual intervention.

Where to find it

Go to Master Data > Accounting > Tax Codes (or Quick Guide > Tax Codes during Setup).

How to create a Tax Code

1. Click New.
2. Enter a Code (e.g., GST7, EXEMPT, VAT20).
3. Select the Tax Authority this code belongs to.
4. Enter the Percentage (e.g., 7.00 for 7%).
5. Enter a Description.
6. On the detail page, set:
   • Is Sales Tax — this code applies to Sales Transactions.
   • Is Sales Default — pre-selected on new Invoices so Users don't have to choose every time.
   • Is Purchase Tax — this code applies to Purchasing Transactions.
   • Is Purchase Default — pre-selected on new Vendor Bills.
7. Save.

Where tax codes are used

• Products — the default tax code applied automatically when the product is added to a document line.
• Customers — overrides the product's default tax code on every invoice for that customer.
• Vendors — overrides the product's default tax code on every bill for that vendor.
• Document lines — can be changed on a per-line basis on any transaction when a one-off exception applies.

Tips

• Always create a 0% or EXEMPT code for zero-rated or exempt items — don't leave tax blank. Using a named exempt code ensures those items appear correctly in your tax Reports and Audit Trail.
• For a customer who is fully tax-exempt (e.g., a government entity), set their tax code on the Customer record to your exempt code. CifraHQ will override the product default on every invoice automatically.
• If your jurisdiction charges multiple taxes simultaneously (e.g., federal GST + provincial PST), both codes can be applied to a single transaction line — each posts to its own authority's liability account.

Related: Tax Authorities · Customers · Vendors · Tax Payments · Form 430 (ITBMS) · Invoices · Vendor Bills