Standard Pricing

Tax Treatment & Pricing Settings

The Tax Treatment feature allows you to control how taxes are applied across pricing, procurement, and margins — at both project and item level.

This ensures accurate cost calculations and supports different tax systems like VAT (Europe) and Sales Tax (US).

Overview

Tax settings are now structured into:

Pricing Settings (Project level)
Procurement Settings
Item-level Overrides

These settings directly impact:

Cost price
Client price
Margins
Purchase Orders
Client Invoices

Key Concepts

1. Retail Prices Include Tax

This setting defines whether supplier prices already include tax.

ON → Prices are tax-inclusive (common in Europe / VAT)
OFF → Prices are tax-exclusive (common in the US)

Impact:
When enabled, the system removes tax from supplier price to calculate the true cost.

2. Taxable on Purchase

This defines whether your purchases are subject to tax.

ON → Taxes are added to your cost (not tax-exempt)
OFF → No tax applied on purchase (tax-exempt)

Impact:
Turning this ON increases cost price, which also affects margins and client pricing.

3. Separate Tax Rates

You can define:

Client Sales Tax → Applied to client invoices
Tax on Purchase → Applied to procurement (optional)

Options:

Use the same rate for both
Or define separate rates for more complex scenarios

Project-Level Settings

Tax settings can be configured:

In Project Settings
During Project Creation

These act as default values for all items in the project.

Item-Level Overrides

You can override tax settings per item:

Open item settings
Switch to Item-level settings
Adjust:
- Tax toggles
- Tax rates

Use case:
Different suppliers or regions within the same project.

You can also:

Reset individual fields to project defaults
Reset all settings at once

How Tax Affects Pricing

Tax settings directly impact calculations:

Cost Price

Affected by:

Tax inclusion (retail prices toggle)
Tax on purchase
Customs & duties
Internal costs

Example Logic

Tax-inclusive price → tax is deducted → lower cost basis
Tax applied on purchase → tax added → higher cost basis

Client Price & Margin

Since client price is based on cost:

👉 Any tax change → affects margin

Margin Target Support

You can define a target margin at project level.

The system calculates actual margin automatically
If target is not met:
- Warnings are shown
- Suggested pricing adjustments are provided

You can:

Accept recommended price
Or manually adjust

Procurement & Invoices

Tax settings are automatically applied to:

Purchase Orders
Client Invoices

Behavior:

Client tax → applied to invoices
Purchase tax → applied to procurement

If item-level overrides exist:

These will be used instead of project defaults

Column Customization

Tax fields can be added as columns in tables and renamed.

Example:

Rename “Sales Tax” → “VAT” for European workflows

Additional Cost Inputs

You can also include:

Customs & Duties (%)
Internal Costs

These:

Apply across item quantities
Increase cost basis
Affect final pricing and margins

Best Practices

Use project defaults for consistency
Override only when necessary
Align tax setup with your region (VAT vs Sales Tax)
Regularly review margin impact after tax changes