Set a tax default for sales or purchases

Set your organisation's tax default for sales (invoices, quotes, credit notes, receive money) or purchases (bills, credit notes, purchase orders, or spend money).

Your organisation's tax default doesn't override an individual contact's tax default.

Four tax default options

  • Based on last sale (or purchase)
  • Tax inclusive
  • Tax exclusive
  • No tax

Access Financial Settings and set your tax default

  1. Go to Settings, then General Settings.
  2. Under Organisation, click Financial Settings.
  3. Under Tax Defaults, select the sales or purchases tax default.

    Image of the Tax Defaults settings on the Financial Settings screen.

  4. Save.

When you next add a sales invoice, quote, credit note, bill, purchase order, spend or receive money, the tax default you set automatically appears in the Amounts are field. You can change the tax treatment using the drop-down list.

If you've set your sales or purchases tax defaults as tax inclusive, when approved, each item will show as tax exclusive. Xero automatically splits out the tax component for reporting.