Configure Tax Settings
BayWise Payments auto-detects the tax rules for your location based on its registered country and state. The Tax Settings tab shows the current tax configuration, lets you create org-level overrides when the system defaults do not match your situation, and manages the list of tax-exempt contacts.
This guide covers reading the tax configuration, understanding the component table, creating overrides, managing exemptions, and handling staleness warnings and future rate changes.
Who can do this: Account Owner and Org Admin only.
Understand the Tax Settings screen
Navigate to Settings → Tax. The screen loads the tax configuration for your current location by resolving the jurisdiction from the location’s country and state.
Tax configuration uses a two-layer resolution system:
- System defaults — pre-loaded rules for common jurisdictions (e.g., UAE VAT at 5%, India GST at 18%). These apply to all organisations in that jurisdiction.
- Org-level overrides — custom rules created by your organisation that replace the system defaults. When an override exists, it takes precedence.
The screen shows which layer is active. If you are using the system default, a label reads System Default. If an override exists, it reads Org Override.
Read the tax components table
The core of the tax configuration is the Tax Components table. Each row represents a tax component that applies to transactions at this location.
| Column | Description |
|---|---|
| Name | The tax component name (e.g., “VAT”, “GST”, “State Sales Tax”) |
| Rate | The tax rate as a percentage (e.g., 5.00%) |
| Method | How the tax is calculated — typically “percentage” |
| Applies To | Which transaction categories this component covers |
Category labels
The Applies To column uses these category labels:
| Label | Meaning |
|---|---|
| All | Tax applies to all transaction categories |
| Parts | Tax applies only to parts and materials |
| Labor | Tax applies only to labor charges |
| Sublet | Tax applies only to sublet services |
| Fees | Tax applies only to fees and surcharges |
At Al Futtaim Auto in Dubai, the tax components table would show a single row: VAT at 5%, applying to all categories, effective from the date UAE VAT was introduced.
Check the effective date and verification status
Below the components table, two date fields provide context:
- Effective From — the date this tax configuration took effect. For system defaults, this is typically the date the tax law was enacted or last amended.
- Last Verified — the date when the tax rules were last confirmed to be current.
Staleness warning
If the Last Verified date is more than 12 months ago, BayWise displays a staleness warning. This does not prevent transactions — it is a reminder to verify that the rates are still current.
A staleness warning means the tax configuration has not been verified in over 12 months. Tax rates can change through government legislation. Review your jurisdiction’s current rates and, if needed, create an org-level override with updated figures.
Review future rate changes
If a future tax rate change has been pre-configured (with an effective date after today), BayWise displays a Future Rate Change preview panel below the current configuration.
This panel shows:
- The new rate(s) that will take effect
- The effective date
- Which components are changing
Future rate changes take effect automatically on their effective date. No manual action is required on the changeover day — the system automatically applies the most recent configuration that has reached its effective date.
Create an org-level override
If the system default does not match your actual tax obligations — for example, because your business has a special tax registration, operates in a free zone, or the system default is outdated — you can create an org-level override.
Open the override form
On the Tax Settings screen, click the Create Override button. This opens an inline form below the current configuration.
Enter the tax components
For each tax component your business must charge:
- Enter the component name (e.g., “VAT”, “GST”, “Municipal Tax”)
- Set the rate as a percentage
- Select the calculation method (typically “percentage”)
- Choose which categories the component applies to (All, Parts, Labor, Sublet, or Fees)
You can add multiple components if your jurisdiction requires compound taxes (e.g., CGST + SGST in India, or state + county tax in the US).
Set the effective date
Enter the Effective From date. This is the date from which your override takes precedence over the system default. For an immediate change, use today’s date. For a future rate change, use the future effective date.
Save the override
Click Save. The override is stored in your organisation’s tax configuration. It immediately replaces the system default for all locations in your organisation within this jurisdiction.
Org-level overrides affect all locations in the same jurisdiction within your organisation. If you need different tax rules per location within the same jurisdiction, contact support — per-location overrides are not yet available in the settings UI.
Manage tax-exempt contacts
Some customers or vendors are exempt from tax — government entities, diplomatic missions, tax-registered wholesalers, or businesses with valid tax exemption certificates. The Tax Settings tab includes a Tax-Exempt Contacts section where you manage this list.
View current exemptions
The Tax-Exempt Contacts list shows all contacts flagged as tax-exempt for this location. Each entry displays the contact name.
Add a tax-exempt contact
Click Add Exempt Contact. Select the contact from your organisation’s contact directory. The contact is added to the exemption list.
When a transaction is recorded against a tax-exempt contact, BayWise skips tax calculation for that transaction automatically.
Remove an exemption
Click the remove button next to the contact you want to un-exempt. The contact will be subject to normal tax rules on future transactions. Existing transactions are not retroactively modified.
At Sharma Motors in Mumbai, the workshop might add their fleet management client — a government transport department — as a tax-exempt contact. All future invoices for that client skip GST calculation.
How tax configuration is resolved at transaction time
When a payment is recorded, BayWise resolves the tax configuration in this order:
- Check if the contact is in the tax-exempt list. If yes, no tax is applied.
- Look for an org-level override for your organisation with an effective date on or before today. Use the most recent one.
- If no override exists, use the system default for the location’s jurisdiction.
- Apply each tax component to the relevant transaction categories and calculate the total tax amount.
The resolved tax breakdown appears on the receipt and in the transaction record.
Common questions
Can I disable tax entirely for my location? You can create an org-level override with a 0% rate. This effectively disables tax calculation while keeping the audit trail of why no tax is charged.
What happens when a government changes the tax rate? If BayWise has pre-loaded the future rate change, it appears in the Future Rate Change panel and takes effect automatically on the effective date. If the change is not pre-loaded, create an org-level override with the new rate and the correct effective date.
Do tax-exempt contacts affect all locations or just this one? Tax exemptions are per-location. If a contact is tax-exempt at one workshop but not another, you must add and remove the exemption at each location independently.
Can I have multiple tax components (compound tax)? Yes. The tax components table supports multiple rows. Each component is calculated independently and summed. This handles jurisdictions like India (CGST + SGST) or US states with layered state, county, and city taxes.
Is there a source reference for the system default rates? System defaults include a source reference field (e.g., a link to the government tax authority publication). This appears on the Tax Settings screen when viewing a system default configuration.
Related pages
- Configure Surcharging — surcharges and taxes are separate line items on receipts
- Configure Payment Preferences — set the base currency used for tax calculations
- Record a Payment — see how tax appears on a transaction
- Understand the Ledger Tab — tax amounts flow into the ledger as separate entries