Tax Rule

Overview

Tax Rule — Business Overview

Tax Rule is a setup document used in Dafater to control how taxes are applied automatically during sales and purchasing transactions. It allows businesses to define clear conditions that determine which tax rates should apply based on factors such as customer type, supplier location, product category, or transaction nature. This ensures tax accuracy, consistency, and compliance without relying on manual selection every time.

What Tax Rule Is Used for in Business Operations

Tax Rule helps businesses: - Apply the correct tax treatment automatically on invoices and orders
- Reduce manual errors in tax selection
- Ensure compliance with local and cross-border tax regulations
- Standardize tax handling across departments and branches

Instead of asking users to decide which tax applies, Tax Rule makes the decision based on predefined business conditions.

Prerequisites Before Using Tax Rule

Before setting up and using Tax Rule, the following should already be in place in Dafater:

Tax accounts and tax rates defined and approved
Customer and supplier records with accurate details (such as location or tax category)
Items or services classified correctly where needed
A clear understanding of tax regulations relevant to your business

Having clean and complete master data ensures Tax Rule works reliably.

Typical Workflow and How It Fits into Business Processes

Tax policies are reviewed by finance or compliance teams
Tax Rule is created to reflect these policies (for example, domestic vs. export sales)
The rule is activated and made available for transactions
During sales or purchase transactions, Dafater automatically applies the correct tax
Finance teams review reports with confidence that tax logic was applied consistently

Once set up, Tax Rule operates quietly in the background, supporting daily operations without interrupting users.

Key Business Scenarios Where Tax Rule Is Essential

Selling to different regions or countries with varying tax requirements
B2B vs. B2C transactions where tax treatment differs
Tax-exempt customers or suppliers
Multiple tax rates for the same product depending on usage or customer type
Regulatory audits, where consistent tax application is critical

In these scenarios, Tax Rule protects the business from compliance risks and financial discrepancies.

Important Considerations for Users

Review Tax Rules regularly to keep them aligned with changing tax laws
Avoid creating overlapping or conflicting rules, which may cause confusion
Ensure business users understand when a rule applies, even if selection is automatic
Coordinate between finance, sales, and purchasing teams for accurate rule design
Test rules with real-life scenarios before relying on them fully

In Summary

Tax Rule is a vital control tool in Dafater that transforms tax handling from a manual decision into a reliable, rule-based process. When set up thoughtfully, it saves time, reduces risk, and ensures every transaction follows your business’s tax obligations accurately and consistently.

Basic Information

Module: Accounts
Document Type: Setup

Fields

Field Name	Label	Type	Options	Description
tax_type	Tax Type	Select	Sales, Purchase	Defines whether rule applies to sales or purchase transactions.
useforshopping_cart	Use for Shopping Cart	Check	-	Apply this tax rule automatically in Dafater shopping cart.
salestaxtemplate	Sales Tax Template	Link	Sales Taxes and Charges Template	Sales tax template applied when rule matches sales transactions.
purchasetaxtemplate	Purchase Tax Template	Link	Purchase Taxes and Charges Template	Purchase tax template applied when rule matches purchase transactions.
customer	Customer	Link	Customer	Specific customer for whom this tax rule applies.
supplier	Supplier	Link	Supplier	Specific supplier for whom this tax rule applies.
item	Item	Link	Item	Item for which this tax rule is applicable.
billing_city	Billing City	Data	-	Billing city condition to determine applicable tax rule.
billing_county	Billing County	Data	-	Billing county used for regional tax determination.
billing_state	Billing State	Data	-	Billing state used to apply correct tax rule.
billing_zipcode	Billing Zipcode	Data	-	Billing postal code for location-based tax calculation.
billing_country	Billing Country	Link	Country	Billing country to determine applicable tax structure.
tax_category	Tax Category	Link	Tax Category	Tax category used to classify and apply tax rules.
customer_group	Customer Group	Link	Customer Group	Customer group for which this tax rule applies.
supplier_group	Supplier Group	Link	Supplier Group	Supplier group for which this tax rule applies.
item_group	Item Group	Link	Item Group	Item group to which this tax rule applies.
shipping_city	Shipping City	Data	-	Shipping city condition for tax applicability.
shipping_county	Shipping County	Data	-	Shipping county used for destination-based tax calculation.
shipping_state	Shipping State	Data	-	Shipping state used to determine applicable taxes.
shipping_zipcode	Shipping Zipcode	Data	-	Shipping postal code for destination-based tax rules.
shipping_country	Shipping Country	Link	Country	Shipping country to determine destination-based tax.
from_date	From Date	Date	-	Start date from which this tax rule is effective.
to_date	To Date	Date	-	End date until which this tax rule is valid.
priority	Priority	Int	-	Priority to resolve conflicts when multiple tax rules match.
company	Company	Link	Company	Company for which this tax rule is applicable.

Permissions

Role	Read	Write	Create	Delete	Submit	Cancel
Accounts Manager	✓	✓	✓	✓

DocType	Relationship	Module
Company	Links to	Setup
Country	Links to	Geo
Customer	Links to	Selling
Customer Group	Links to	Setup
Item	Links to	Stock
Item Group	Links to	Setup
Purchase Taxes and Charges Template	Links to	Accounts
Sales Taxes and Charges Template	Links to	Accounts
Supplier	Links to	Buying
Supplier Group	Links to	Setup
Tax Category	Links to	Accounts