Taxes (Canada)

Your business’ financials are affected by regulatory taxes and each organization has different country specific taxes to adhere to. You can edit or add taxes from the Settings page.

Enable Taxes

Before adding taxes, you’ll have to enable them for your organization. Here’s how you can enable taxes:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• Click Enable Tax to enable taxes for your organization.

Tax Rates

There are different tax rates i.e., GST, HST, and provincial tax rates that are applicable in different provinces in Canada. Go to this page to know about the different tax rates in Canada.

Add New Tax Rates

Here’s how yoy can create new tax rates:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Rates.
• Click on + New Tax.
• Provide a Tax Name.
• Enter the relevant Rate in %.
• Specify the name of the Tax Agency.
• Check the This tax is a compound tax option if you pay a secondary tax in addition to your primary tax.
• Click Save.

View Records Associated With a Tax Rate

Here’s how you can view the records associated with a tax rate:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Rates.
• Hover over the tax whose associated records you wish to view, and click the Dropdown icon.
• Click View Associated Records.

You can now view all the records associated with the selected tax rate.

Edit Tax Rate

Here’s how you can edit an existing tax rate:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Rates.
• Click the tax you wish to edit.
• In the Edit Tax pop-up, make the necessary changes.
• Click Save for the changes to take effect. If this tax has already been applied in some transactions, you will be asked to confirm if you wish to update the new tax rate in those transactions as well.

Delete Tax Rate

Here’s how you can delete a tax rate:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Rates.
• Hover over the desired tax and click the Dropdown icon on the right side.
• Click Delete.
• In the Delete Tax pop-up, click Delete again. The existing tax rate will be deleted.

Mark an Active Tax Rate as Inactive

Here’s how you can mark a tax rate as inactive:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Rates.
• Hover over the tax you wish to mark as inactive and click the Dropdown icon.
• Click Mark as Inactive. The selected tax rate will now be inactive.

Mark an Inactive Tax Rate as Active

Here’s how you can mark a tax rate as active:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Rates.
• Click the Active Taxes dropdown and select Inactive.
• Hover over the tax you wish to mark as active and click the Dropdown icon.
• Click Mark as Active.

Tax Group

A Tax Group is a combination of multiple independent taxes that are applied to the same base amount. Each tax in the group is calculated separately on the original price and then added together to get the total tax amount.

Suppose you have an item priced at $100 and the following taxes apply:

• State tax: 5%
• Federal tax: 10%

Calculations:

1. State tax = 5% of $100 = $5
2. Federal tax = 10% of $100 = $10
3. Total tax = State tax + Federal tax = $5 + $10 = $15
4. Final price = $100 (original price) + $15 (total tax) = $115

Add a New Tax Group

Here’s how you can add a new tax group:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Rates.
• Click the + New Tax dropdown and select New Tax Group.
• Provide a Tax Group Name.
• Choose the taxes to be associated to the new tax group.
• Click Save. The new tax group will be created.

Tax Agencies

A tax agency is a government organization responsible for collecting taxes and enforcing tax laws. The main federal tax agency is the Canada Revenue Agency (CRA), while Revenu Québec handles provincial taxes in Quebec.

Other provinces generally rely on the CRA to administer provincial income tax, though they may have agencies for specific taxes such as:

• BC Ministry of Finance
• Alberta Treasury Board and Finance
• Ontario Ministry of Finance

Add a New Tax Agency

Here’s how you can add a new tax agency:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Agencies.
• Click + New Tax Agency.
• Enter the name of the Tax Agency and mention your organization’s Registration Number provided by the tax agency if required.
• Provide a short description if necessary.
• Click Save. A new tax agency will be created.

Bulk Create Tax Agencies

Here’s how you can create multiple tax agencies at the same time:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Agencies.
• Click the dropdown icon next to + New Tax Agency and select Bulk Create Tax Agencies.
• Enter the names of the Tax Agencies one by one and mention your organization’s Registration Number provided by the tax agency if required.
• Provide a short description if necessary.
• Click Save. The tax agencies will be created.

Edit a Tax Agency

Here’s how you can edit an existing Tax Agency:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Agency.
• Click the Tax Agency you git git wish to edit.
• In the Edit Tax pop-up, make the necessary changes.
• Click Save for the changes to take effect.

Delete a Tax Agency

Here’s how you can delete a Tax Agency:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Agencies.
• Hover over the desired Tax Agency and click the Delete icon on the right side.
• In the pop-up, click OK to confirm. The existing tax agency will be deleted.

The tax agencies associated with transactions, customers or with a tax cannot be deleted.

Tax Preferences

Enable Tax Override

There might be cases wherein the tax amount in a transaction varies because your vendor calculates the tax applied on the transaction differently.

Zoho Spend allows you to account for these minor variations by allowing you to manually change i.e over-ride an automatically calculated tax amount, once you apply a tax to a transaction.

In order to override taxes in transactions, you’ll have to enable it first. Here’s how:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• In the Taxes pane, click Tax Preferences.
• Check the Override tax in purchases transactions option.
• Click Save. Now you will be able to override taxes in your transactions

Tax Override in Transactions

When you create or edit transactions, you can override the taxes for that transaction. Here’s how:

• In the transaction create or edit page, go to the Total section below the Item Table.
• Click the Change option in the Total Tax Amount field.
• Modify the tax amount that has been calculated automatically and click Update.
• Click Save as Draft or Save as Open. Now the transaction will be saved with the modified tax rate.

Disable Taxes

Here’s how you can disable taxes in your organization:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Taxes under Taxes & Compliance.
• Select Disable Tax, available in the top-right corner.