Party Tax Profiles
A Party Tax Profile classifies a business for tax purposes — is this a VAT-registered company, an end consumer, a tax-exempt body, a Brazilian Lucro Real firm? It answers the “who” in a transaction, for both sides: the seller (you) and the buyer (your customer or vendor).
Keep it separate in your mind from a Tax Profile, which classifies the product (the “what”). They’re two independent dimensions on a tax rule — because who is trading and what they’re trading are genuinely different questions. A standard product sold to an exempt charity is taxed differently from the same product sold to an ordinary business.
Access you'll need. Setting up and maintaining party tax profiles requires the Accounting Admin v2 or Accounting Controller v2 permission set. The Accounts Payable v2, Accounts Receivable v2, and Read Only v2 sets can view them but not change them.
Where it’s assigned — the two parties
A party profile isn’t set on the invoice — it lives on the business records, and the engine reads both ends:
| Record | Tax fields you set | Role in the engine |
|---|---|---|
| Entity (your company) | Party Tax Profile, Tax Jurisdiction | The seller profile & origin |
| Account (customer / vendor) | Party Tax Profile, Tax Jurisdiction | The buyer profile & destination |
So you assign a profile once per customer and once per entity. From then on, every invoice between them carries those classifications automatically — no per-invoice choice, no chance to forget.
The fields — with UK & Brazil values
Every field, with a UK profile (VAT-registered business) beside a Brazil profile (Lucro Real ICMS contributor):
| Field | Type | Required | What it’s for | 🇬🇧 UK Registered | 🇧🇷 Brazil Lucro Real |
|---|---|---|---|---|---|
| Code | Text · External ID | Yes | Match/seed key (COUNTRY-TYPE-REGIME) | GB-VAT-REG | BR-LR-CONTRIB |
| Taxpayer Type | Picklist | Yes | Registered Business · Unregistered · End Consumer · Government · Non-Profit · Foreign Entity | Registered Business | Registered Business |
| Tax Regime | Picklist | No | Standard · SME · Lucro Real · Lucro Presumido · Simples Nacional · Composition · Flat Rate · Other | Standard | Lucro Real |
| Is Tax Exempt | Checkbox | No | Fully exempt from tax | No | No |
| Is State Tax Contributor | Checkbox | No | Registered collector of state tax (Brazil ICMS) | No | Yes |
| Exemption Basis | Text | If exempt | Certificate / legal basis for exemption | — | — |
| Description / Notes | Text | No | When to assign this profile | … | … |
| Is Active | Checkbox | No | Off → can’t be assigned to new records | Yes | Yes |
How the engine uses the profiles
A Tax Rule can target a party profile on either side, and most rules leave them blank (= “any party”). When set, the engine matches:
| Rule dimension | Matched against | Use |
|---|---|---|
| Party Tax Profile (Buyer) | The customer/vendor Account’s profile | “Only for end consumers,” “only for exempt bodies” |
| Party Tax Profile (Seller) | Your Entity’s profile | “Only when we sell as X” |
| Seller Regime | The Entity profile’s Tax Regime value | The Brazil PIS/COFINS rate split |
| Buyer Contributor Scope | The Account profile’s Is State Tax Contributor checkbox | Brazil DIFAL/FCP fire only for non-contributor (consumer) buyers |
BR-LR-CONTRIB (Lucro Real), only the 1.65% rule matches; switch the
entity to a Lucro Presumido profile and the 0.65% rule takes over instead. Same product,
same customer — the seller’s profile changes the tax. (This pairs
with the two PIS Tax Types and their recoverability flags.)
Real data: UK and Brazil profiles
🇬🇧 United Kingdom — 3 profiles
| Code | Name | Taxpayer Type | Regime |
|---|---|---|---|
GB-VAT-REG | VAT Registered Business | Registered Business | Standard |
GB-VAT-FRS | Flat Rate Scheme | Registered Business | Flat Rate Scheme |
GB-VAT-UNREG | Unregistered / Below Threshold | End Consumer | Standard |
🇧🇷 Brazil — 5 profiles
| Code | Name | Regime | ICMS Contributor? |
|---|---|---|---|
BR-LR-CONTRIB | Lucro Real (ICMS Contributor) | Lucro Real | Yes |
BR-LP-CONTRIB | Lucro Presumido (ICMS Contributor) | Lucro Presumido | Yes |
BR-SN-CONTRIB | Simples Nacional | Simples Nacional | Yes |
BR-EXEMPT | Tax Exempt Entity | Other | No |
BR-CONSUMER | End Consumer (Non-Contributor) | Other | No — this is what makes DIFAL/FCP fire |
The contrast is the point: the UK distinguishes parties mostly by registration status (registered, flat-rate, unregistered), while Brazil distinguishes them by tax regime, because the regime drives the rates.
Guardrails & setup
- Code is uppercase, no spaces — external ID, two validation rules enforce it.
- Exemption Basis is required when a profile is exempt — you must record the certificate or legal basis, so the exemption is defensible in an audit.
- Assign on the Account and the Entity. Set each customer/vendor’s Party Tax Profile and Tax Jurisdiction; set your entity’s once. The engine does the rest.
- Seeded per country. The Tax Seeding Wizard creates the country’s standard profiles; you assign them to your accounts.
Where to go next
- Tax Profiles — the product-side classification counterpart.
- Product Fiscal Profiles — how products link into the tax system.
- Tax Rules — how rules match on party classification.
- How Tax Calculates on a Document — party profiles in a live calculation.
- Sales Invoice Tax — party profiles shaping invoice tax.
Frequently asked questions
A Party Tax Profile classifies the business (registered, exempt, Lucro Real…). A Tax Profile classifies the product (standard-rated, zero-rated, exempt). They’re separate dimensions, and a rule can use both at once — e.g. “standard goods sold to an end consumer.”
On the customer’s Account — the Party Tax Profile and Tax Jurisdiction fields. Your own company’s profile goes on the Entity. The engine reads the entity (seller) and the account (buyer) on every invoice.
Through the regime. In Brazil, rules carry a Seller Regime condition; your entity’s profile sets the regime (Lucro Real, Lucro Presumido, Simples), so only the rules for that regime fire. It’s why a Lucro Real firm and a Lucro Presumido firm pay different PIS/COFINS on identical sales.
It marks a party as a registered collector of state-level tax — in Brazil, an ICMS contributor. It distinguishes businesses that participate in the ICMS chain from end consumers and non-contributors, which affects how interstate tax (and DIFAL) is treated.
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