alt="international"/> US users can access a Sales Tax lookup option, to calculate and add tax automatically to US-based customer invoices. This service is provided by Avalara: www.avalara.com.
All of the generally used default tax codes are automatically set up. If necessary, additional tax rates can be added via the New Tax Rate button. If you opt to use Xero’s Global version, you may need to set up additional tax rates to comply with the tax laws of the country your business is based in.
TABLE 2-3 Xero Tax Rate Settings by Region
| Australia | New Zealand | South Africa | United Kingdom* | United States** | Global* | ||
|---|---|---|---|---|---|---|---|
| GST Free Expenses GST Free Exports GST on Capital GST Free Capital GST on Capital Import GST on Expenses GST on Imports GST on Income Input Taxed BAS Excluded | 15% GST on Expenses (15%) 15% GST on Income (15%) GST on Imports No GST Zero Rated | Capital Goods Imported (0%) Change in Use (15%) Change in Use and Export of Second-hand Goods (15%) Exempt and Non-Supplies (0%) Goods and Services Imported (0%) No VAT (0%) Old 14% Change in Use (14%) Old 14% Change in use and Export of 2nd-hand Goods (14%) Old 14% Standard Rate Purchases (14%) Old 14% Standard Rate Purchases — Capital Goods (14%) Old 14% Standard Rate Sales (14%) | 20% VAT on Expenses 20% VAT on Income 5% VAT on Expenses 5% VAT on Income 20% (VAT on Expenses) 20% (VAT on Income) 5% (VAT on Expenses) 5% (VAT on Income) EC Acquisitions (20%) EC Acquisitions (Zero Rated) Exempt Expenses Exempt Income No VAT Reverse Charge Expenses (20%) VAT on Imports Zero Rated EC Goods Expenses Zero Rated EC Goods Income Zero Rated EC Services Zero Rated Expenses | Sales Tax on Imports (0%) Tax Exempt (0%) Tax on Purchases (0%) Tax on Sales (0%) | Sales Tax on Imports (0%) Tax Exempt (0%) Tax on Purchases (0%) Tax on Sales (0%) | Old 14% Standard Rate Sales — Capital Goods (14%) Standard Rate Purchases (15%) Standard Rate Purchases — Capital Goods (15%) Standard Rate Sales (15%) Standard Rate Sales — Capital Goods (15%) Zero Rate (Excluding Goods Exported) (0%) Zero Rate (only Exported Goods) (0%) | Zero Rated Expenses Zero Rated Income Plus, if the customer uses the Flat Rate VAT scheme: 20% VAT on Capital Sales 20% VAT on Capital Purchases |
* The apparent duplication in settings for the UK is due to changes made as the UK exits the EU.
** The default setting for these tax rates is 0 per cent, which can be overridden.
To add a new tax rate, follow these steps:
1 From the organisation name in the top left corner of the screen, click on Settings in the drop-down list and then Looking for Advanced Settings? Under Advanced Settings, click on Tax Rates.The Tax Rates window opens (see Figure 2-9).
2 Click on the New Tax Rate button and in the Tax Rate Display Name field, and enter the relevant information.For example, you could enter ‘GST — Singapore’.
3 In the Tax Components fields, enter the Tax and then enter the actual tax rate as a percentage.If an additional tax component is required — if, for example, the area is governed by both a federal and a state tax — repeat Step 3 and add another Tax Component.
4 Click the Save button.
Source: Xero 2022
FIGURE 2-9: The Tax Rates window.
Chapter 3
Converting to Xero from Another System
IN THIS CHAPTER
If you’ve been maintaining your business records in a non-computerised system (okay, I mean a shoebox) or a computerised format, you can move your data across to Xero. Changing accountants or accounting systems is a significant business decision — but don’t let this stop you! Empower yourself and take responsibility for the project. This chapter outlines what is involved in converting to Xero from another system. You can simply bring opening balances into Xero or you can go through a more complex and involved conversion process, where you import historical transactions into Xero. Converting to Xero is an opportunity to detox your data — cleaning and streamlining it — and customise your data to generate useful business information. Have a specialist on call and give the conversion a go!
In this chapter, I take you through some tips for converting to Xero from a non-computerised system and from a computerised system, including some general guidance on working with CSV files and preparing your data for importing. I then take you through the specific processes for importing data into Xero, and cover some common issues that arise when turning off your old system.
Note: The process for exporting data from your old accounting system is different for each possible system. Fortunately, Xero can connect you with services that can help you convert some accounting files to Xero. A manual conversion is definitely possible; however, these days my preference
