BILLmanager 6
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BILLmanager 6
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Finances and accounting
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Taxes

Taxes

BILLmanager allows a service provider to set taxes for his customers. The tax amount can be added and included in the tariff price.

Taxation rules are used for tax management. Every rule defines:

  • Tax percentage rate.
  • Clients from certain countries and regions that the tax will be applied to. 
  • Product types the tax will be imposed upon. 
  • Tax period.

Tax settings

Note:
If the client is assigned to the group, the tax rules of that group will be applied. If the client is not assigned to a group, the policy settings from the provider's configuration form will be applied.

Complete the following steps to create tax rules: 

  1. Open the tax rules configuration form: 
    1. for all clients — Provider → Taxes → Settings or Provider → Providers → Taxes → Settings;
    2. for a certain client's group — Clients → Client groups → Taxes → Settings. 
  2. Do not include into price — this option defines how to collect a tax from customers. With this option disabled, the tax amount will be included in the tariff price. The same total service price will be set for all users. With this option enabled, the tax amount won't be included in the tariff price. The billing system will add the tax to the total service price. The amount can differ depending on tax rules.  
  3. Show tax when a client adds funds — selecting this checkbox will display a tax on the advance payment form.
  4. Click on Ok to save the changes.

How to create a taxation rule

Every provider in BILLmanager has a separate set of tax rules. The rules of the first provider do not influence the tax rules of the clients of the second one.

The billdaily cron creates an expense including company tax if there is a payment in which tax is specified at the time the expense is created.

To create a rule:

  1. Go to Provider → Taxes → Add or — Provider → Providers → select a provider → Taxes → Add. 
  2. Enter the Company that the tax will be applied to. The field is not available if the Do not include into price checkbox is selected. 
  3. Select a Payer country this tax will be applied to. If you select only a country (the region is not selected), it will be a federal tax. The rule will be used for all payers of the selected country regardless of their region.  
  4. Select a Region of the country to apply a regional tax. It will be applied only to the payers of the selected region of the country. The amount of the regional tax will be added to the federal tax.  Example: a service provider created two tax rules: federal and regional. A 10% federal rule is applied to all the payers of the USA. A 15% regional tax rule is applied to the state of Washington. The tax amount is not included in service price. Two clients from Idaho and Washington order the same service which costs 10$: 
    • The client from Idaho will pay only the federal tax. The tax amount is 1$, and the total amount due is 11$
    • The client from Washington will pay both the federal and regional taxes.  The tax amount is 2.5$, and total amount due is 12.5$ 
  5. Set the Tax rate in %. 
  6. Enter the Time zone that BILLmanager will use to check the start and end date of the rule. 
  7. Enter the Start date and End date of the rule.
  8. Apply to the selected product types — select the product types that the tax will be applied to. This option is applied to all of the existing companies (the Company field is set to "All"). 
  9. Select Product types that the tax will be applied to. The field is displayed only if the Apply to the selected product types checkbox is selected. 

You can create a tax rule for the client group: Clients → Client groups → Taxes → Add. Or a personal tax rate in Client → Clients → Taxes → Add.

Tax rule management 

Several tax rules

You can set several tax rules for a client: personal, for a client group, or for all provider's clients. Tax rates are set according to the following priority:

  1. Personal tax rate. 
  2. If the personal tax rate is not specified, the billing system will apply the tax rate of the group that the client is assigned to.
  3. If the group tax rate is not specified, the rate for all provider's clients will be applied. 

Rule priority

A  rule for a certain county or product type has a higher priority than a non-specified country or product type.

Example: a service provider created two tax rules. The first rule is applied to the payers of the USA. The second one is applied to all countries (the Payer country field is set to Select a country). For the USA the tax rate is 10%, for other countries — 5%. The tax amount is not included in service price. 

A payer from the USA orders a service which costs 100$.  As the rule for the USA has a higher priority, the client will be imposed a 10$ tax, and the total amount due will be 110$.

Payers from different countries

When creating several federal taxes with different rates, we recommend disabling the option which allows creating payers from different countries: Provider → Global settings → Payers → Allow a client to create payers from different countries. This option disturbs principles of operation of the taxation rules. 

Note:
When you enable this option, if several tax rates are set up, a client will be imposed the rules that were applied to his services for the last time.