Setup of Net or Gross Tax Calculation

To ensure accurate pricing and compliance with local tax regulations, you can define how taxes are calculated—either as inclusive (gross) or exclusive (net). Start by specifying the default tax calculation mode for a tax provider. You can then fine-tune tax behavior by assigning a specific mode to individual customers or vendors. And when exceptions arise, you have the flexibility to switch the tax mode directly within a document.

Important: The Net/Gross Entry Mode feature must be enabled on the Enable/Disable Features (CS100000) form.

Specify a Tax Providers’ Default Tax Calculation Mode

Select the default tax calculation mode for a tax provider on the Tax Providers (TX102000) form. In the Default Tax Calculation Mode box, you can select one of the following options:

  • Gross: Refers to inclusive taxes, meaning the price includes taxes
  • Net: Refers to exclusive taxes, meaning the price does not include taxes

Keep in mind that you can override this setting for a specific customer, vendor, or directly within a document.

Specify the Tax Calculation Mode for Customers and Vendors

We recommend that you specify the tax calculation mode for each customer or vendor to align with their specific tax regulations or pricing structures. The Tax Calculation Mode box is available in the following locations:

  • On the Customers (AR303000) form, on the Shipping tab
  • On the Vendors (AP303000) from, on the Purchase Settings tab

Tax Calculation Mode in Documents

You can view and adjust the tax mode applied to each document. The Tax Calculation Mode box is available on the following forms:

Note that the tax provider's tax zone—the tax zone with the External Tax Provider check box selected on the Tax Zones (TX206000) form—must be specified in the document.

If the project functionality is in use in your system, the Tax Calculation Mode box is not shown on the Project Quotes (PM304500), Pro Forma Invoices (PM307000), and Subcontracts (SC301000) forms. During tax calculation: