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# Overview

Tax profile setup and maintenance.

## Tax kinds

Every tax profile has a `kind`.

| Kind  | Use                                                                                                                                                                                               |
| ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| `VAT` | Tax charged on sales and paid on purchases. Selectable as a line tax on invoices, bills, expenses and journals, and reported on the VAT return. Profiles created before `kind` existed are `VAT`. |
| `WHT` | Withholding tax, deducted from a payment. Applied when paying a vendor or when a customer pays you, not as a line tax.                                                                            |

The `kind` is set when the profile is created and cannot be changed afterwards.

## Withholding tax profiles

For a `WHT` profile the two account fields have a fixed meaning:

* `output_account_id` is the withholding tax payable account, a liability account. It is credited when you withhold tax from a vendor and is the amount you owe the tax authority.
* `input_account_id` is the withholding tax receivable account, an asset account. It is debited when a customer withholds tax from your payment and is the credit you hold against your own tax.

`deduct_on` controls when the tax is deducted. `PAYMENT` is the default and the only value currently posted. `BILL` is reserved.

`withholding_basis` controls what the rate applies to when a payment or receipt does not state its own base.

| Basis                | Base used                                            |
| -------------------- | ---------------------------------------------------- |
| `EXCL_VAT` (default) | The VAT-exclusive share of the amount being settled. |
| `INCL_VAT`           | The full amount being settled.                       |

Both `deduct_on` and `withholding_basis` can be changed later, on withholding tax profiles only. Sending either on an update to a `VAT` profile is rejected.

```json
{
  "code": "WHT5",
  "name": "WHT 5%",
  "rate": 5,
  "kind": "WHT",
  "deduct_on": "PAYMENT",
  "withholding_basis": "EXCL_VAT",
  "input_account_id": "b85a9785-fbbd-4858-b9cd-c79ab926e70e",
  "output_account_id": "2b0d1461-e52e-4a1a-a69c-11801431c2c9"
}
```

Withholding tax is reported on the Withholding Tax Schedule, separate from the VAT return.