Manage tax rates

For: business owners setting up tax rates for their jurisdiction. What you need: owner or admin access.

1. Go to tax rate settings

Go to Settings > Tax rates.

2. Create a tax rate

Click Add tax rate. Fill in:

• Name: a label visible on invoices, like "BTW 21%" or "VAT 20%"
• Rate: the percentage, typed in your number format with up to two decimals (21 for 21%, 9,5 or 9.5 for 9.5%). Made with Pepper stores it as basis points (2100). Values above 100 or with a third decimal are refused.
• Country: optional. Helps organize rates when you sell to multiple countries.
• UBL code: the tax category for XML export: Standard rate (S), Zero rate (Z), Reverse charge (AE) or Exempt (E).
• Exemption code (VATEX): for exempt (E) and reverse-charge (AE) rates. Reverse charge uses VATEX-EU-AE. The form refuses a code that does not belong to the selected category.
• Exemption reason: text for exempt and reverse-charge rates, for example "Reverse charge".
• Default rate for this country: one rate per country can be the default, and one rate among the rates without a country (All countries). When you mark a rate, Made with Pepper removes the mark from the previous default of the same country.
• Active: on by default. An inactive rate cannot be selected for a new line or a new item.

Click Create tax rate. If the rate text is not a valid percentage, the form shows "Enter the rate as a percentage with at most two decimals, for example 21 or 5.5." and keeps what you typed.

Category rules

The form refuses a rate that breaks these rules:

The UBL XML export writes the exemption code and reason in the tax breakdown of E and AE lines.

Order and delete

The list shows each rate with its country, or All countries for a rate without one. Click Move up or Move down to change the order in which rates appear on invoices. Delete asks first. Documents that already use the rate keep their lines and totals.

A new installation includes the national rates of several countries and two rates without a country, a zero rate and a reverse-charge rate. Those two are named in the language you install in.

3. Common setups

Netherlands (BTW):

Germany (USt):

4. Using rates on invoices

When you add a line item to an invoice, select the tax rate from the dropdown. Each line can use a different rate. The invoice totals show a breakdown by rate.

Saving a draft stores the rate's name, percentage, category, exemption code and exemption reason on each line. Editing, deactivating or deleting a rate here does not change existing documents, including drafts. Each saved line keeps its rate through later saves. If that rate leaves the list, the line shows as saved.

To apply a changed percentage or exemption text to a draft:

1. Open the draft.
2. Click Edit.
3. Open Tax on the affected line.
4. Select an active rate.
5. Click Save draft.

Selecting the same active rate uses its current values. The totals panel shows the new percentage when you select it. A deactivated or deleted rate cannot be selected for a new line.

What Made with Pepper does not do

Made with Pepper does not validate VAT numbers against VIES. It does not determine whether reverse charge applies to a specific transaction. You set the correct tax rate on each line item. Talk to your accountant if you are unsure which rate applies.

Related pages

• Tax basics
• EU VAT
• Reverse charge