Taxation

Taxation covers everything the instellix tax engine needs to calculate the correct tax for each document automatically: how taxes are applied, the tax rules that determine the rates, and the categories and exemptions that document why a reduced or zero rate applies.

instellix calculates taxes per line item and finds the applicable tax rule from criteria such as the performance location and the customer type. For example, a tax rule for Germany can apply 19% VAT to digital products sold to consumers — and a time-versioned variant of the same rule can already hold a future rate change, so it takes effect automatically on the date it becomes law.

The following pages describe the building blocks of taxation in instellix. Check the respective documentation based on your business needs:

• How taxes are applied — how the engine calculates taxes per line item, and which tax rule applies when several match.
• Tax Rules — configure tax rates along criteria such as performance location, customer type, and item type, with time-versioned variants for rate changes.
• VAT Categories & Tax Exemptions — document why an item is taxed at a reduced or zero rate, with the correct VAT category and exemption reason.
• Performance and Tax Location — how the performance location and tax location are determined and used in the tax calculation.
• Locations and Countries — the locations and countries available to your tax configuration.

Related information

• Tax Provider
• VAT ID Validation