Overview
In BQE CORE, you can apply taxes to service and expense items and pass them through to invoices, bills, and other transactions. CORE supports two independent tax mechanisms.
Item taxes (Tax 1/2/3) are set for individual Activity and Expense items. CORE applies the combined tax percentage to the pre-tax amount of each line item.
Named tax rates are defined in the Tax Rates catalog under Settings > Billing & Invoices > Tax Rates and assigned to clients and projects. Each named tax is calculated once against the total service or expense amount on an invoice.
You can customize tax labels for your jurisdiction using Custom Labels. GST, HST, PST, VAT, and similar jurisdiction-specific taxes can be configured as named tax rates in the Tax Rates catalog.
Purchase Tax lets you record tax included in an expense paid to a vendor separately from tax charged to the client.
Note: Item taxes (Tax 1/2/3) are included in the contract amount. Named tax rates are not included in the contract amount.
Field Descriptions
| Field Name | Field Description |
| Settings > Billing & Invoices > Tax Rates > | |
| Default Activity Rates: Activity Rate 1 / 2 / 3 | Sets the default Tax 1, Tax 2, and Tax 3 percentages for new activity (service) items. These rates can be overridden at the activity level. |
| Default Expense Rates: Expense Rate 1 / 2 / 3 | Sets the default Tax 1, Tax 2, and Tax 3 percentages for new expense items. These rates can be overridden at the expense level. |
| Invoice Total Service Taxes to exclude item tax | Determines whether invoice-total taxes applied to Services exclude item-level taxes (Tax 1/2/3) already associated with the activity items when calculating the total tax amount charged on the invoice. |
| Invoice Total Expense Taxes to exclude item tax | Determines whether invoice-total taxes applied to Expenses exclude item-level taxes (Tax 1/2/3) already associated with the expense items when calculating the total tax amount charged on the invoice. |
| Tax Rates list | Lists the named tax rates defined for your company, including their Account, Tax Type, Rate, Taxable Base %, Tax Application, Effective From, Effective To, and Status. The list can be searched by tax rate or name. |
| Settings > Billing & Invoices > Tax Rates > Add Tax Rate | |
| Status | Determines whether the tax rate is Active or Inactive. Active tax rates are available for assignment to clients and projects. An Inactive tax rate no longer calculates on clients or projects where it is currently assigned and is not available for new assignments. |
| Default | Identifies the default tax for its Tax Application type, either Services or Expenses. Only one tax can be the default for each type, and the Service and Expense defaults are independent. Setting another tax as the default automatically clears the previous default. A default tax cannot be deleted or have its Default setting removed until another tax of the same type is made the default. The first tax created for a given type is automatically set as the default. The Default setting is used by the Public API and integrations when an invoice has multiple taxes associated with it and is pushed into CORE. |
|
Basic Info: Name |
Specifies the tax name displayed on invoices and throughout CORE, such as GST or State Sales Tax. |
| Tax Code / ID | Specifies an optional external identifier used for tax reporting or remittance, such as a government tax code. This value is not displayed on invoices. |
| Tax Type | Determines how the tax is calculated. Percentage calculates the tax as a percentage of the taxable amount. Flat Amount applies a fixed amount once per invoice, regardless of the amount billed. |
| Tax Application | Determines what the tax applies to: Invoice Total -Services or Invoice Total - Expenses. |
|
Rate and Limits: Rate |
Specifies the tax rate. When Tax Type is Percentage, the value is entered as a percentage, such as 7.50 for 7.5%. When Tax Type is Flat Amount, the value is a dollar amount. |
| Display Order | Determines the order in which the tax appears relative to other taxes assigned to the same invoice. |
| Taxable Base % | Specifies the portion of the taxable base to which a percentage-type tax applies before the Rate is calculated. The default is 100%. For example, a 7% tax with a Taxable Base % of 30 produces an effective rate of 2.1%. |
| Ceiling | Specifies the maximum dollar amount that a percentage-type tax can produce on a single invoice. If the calculated tax exceeds the Ceiling, the tax amount is capped at the Ceiling. This field is not available for Flat Amount taxes. Changes to the Ceiling apply to future invoices. |
| Exemptions | Defines Activity Types or Expense Item Types that are excluded from the taxable base for the tax. Items are taxable by default unless they are included in the exemption list. An item can be exempt from one assigned tax while remaining taxable under another assigned tax. |
|
Exemption Dates: Effective From |
Specifies the date from which the tax rate applies. A future tax rate is created as a separate tax entry with its own Name, Rate, and Effective From date. Both the current and future tax rates can be assigned in advance. |
| Effective To | Specifies the date through which the tax rate applies. Leave this field blank for a tax rate with no end date. |
|
GL Account: Account |
Specifies the general ledger (GL) account used to record and post the tax amount. For example, the tax may be posted to GL account 25400 – Expense Tax Payable. |
Global Taxes
Named tax rates are defined company-wide under Settings > Billing & Invoices > Tax Rates. Item tax defaults are also defined at this level using Activity Rate 1/2/3 and Expense Rate 1/2/3. These default rates are applied to new activity and expense items and can be overridden at the individual item level. Each named tax rate can have its own Ceiling and Status.
Client Taxes
Taxes are assigned to a client from the Tax Rates catalog under Clients > Detail View > General > Billing Options. You can assign multiple tax rates to a client. Only Active tax rates are available for assignment. Tax rates assigned to a client are copied to a new project when the project is created. After the project is created, its tax assignments can be managed independently.
Project Taxes
Tax rates assigned to a client are copied to a new project when the project is created. You can add or remove tax rates for the project without changing the client's tax assignments.
Project tax assignments are independent of the tax assignments of other projects under the same client.
You can also assign or remove tax rates for multiple existing projects at once using the batch update tool on the project list, rather than opening each project individually.
A project template can include a default set of tax rate assignments. When you create a new project from a template, the template's tax assignments are copied to the project automatically. If your firm operates across multiple jurisdictions, you can maintain a separate template for each one, preconfigured with the correct tax rates.
Note: You can assign more than one tax rate to the same project, and they do not compound. Each calculates independently against its own taxable base, and the results are added together. Example: a 5% Services tax (Taxable Base % = 100) and a 7% Services tax (Taxable Base % = 30), both assigned to the same project, produce $50 and $21 respectively on a $1,000 services invoice, a combined $71 in tax. Each assigned tax prints as its own labeled line on the invoice, ordered by Display Order.
Item Taxes
Item taxes for labor and services are set on Activity Items. Item taxes for expenses are set on Expense Items. These taxes are applied at the line-item level.
Default item tax rates can be defined at the company level and overridden for individual activity and expense items.
Purchase Tax
Purchase Tax lets you record tax included in an expense paid to a vendor separately from tax charged to the client. This helps you track the tax paid on an expense, the tax collected from the client, and the resulting balance.
When Purchase Tax is specified for an expense, CORE calculates the expense cost excluding the purchase tax before calculating the amount charged to the client.
For example, if you pay $110 for a taxi fare that includes 10% GST, you can record the purchase tax when entering the expense. CORE calculates the pre-tax expense cost as $100 and then applies the applicable taxes assigned to the project or client when calculating the client charge.
Use VAT or GST reports to review the taxes paid by your company and the taxes collected from clients.
Cost Amount = Net Cost Amount + Purchase Tax Amount
Cost with Purchase Tax = Amount without Purchase Tax / (1 + Purchase Tax Rate / 100)