Tax Profiles
A Tax Profile classifies a product or service by how it is taxed — standard-rated, reduced-rate, zero-rated, exempt. It answers the “what” in a transaction, the partner to the “who” that Party Tax Profiles answer.
Think of it as the tax-relevant category of a thing you sell. A loaf of bread, a children’s book, and an export are all zero-rated in the UK — very different products, one tax treatment. The Tax Profile is what groups them so a single rule can cover them all.
Access you'll need. Setting up and maintaining 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.
The fields — with UK & Brazil values
| Field | Type | Required | What it’s for | 🇬🇧 UK Standard | 🇧🇷 Brazil Standard |
|---|---|---|---|---|---|
| Code | Text · External ID | Yes | Match/seed key | GB-STD-20 | BR-STD-GOODS |
| Category | Picklist | Yes | The treatment kind (see below) | Standard Goods | Standard Goods |
| Description | Text Area | No | What this profile covers | Standard-rated supplies at 20% | Standard goods |
| Notes | Long Text | No | Examples, edge cases | … | … |
| Is Active | Checkbox | No | Off → excluded from matching | Yes | Yes |
The Category picklist captures the standard treatments: Standard / Reduced Rate / Zero-Rated / Exempt Goods, Capital Goods, Standard / Reduced Rate / Exempt Services, and Digital Services.
How it connects products to rules
The Tax Profile sits in the middle of a short chain:
A product is linked to a Tax Profile through its Product Fiscal Profile (which also carries country codes like the UK’s — none, India’s HSN, Brazil’s NCM). A Tax Rule names a Tax Profile as one of its matching conditions. When the two line up — the product’s profile equals the rule’s profile — that rule fires for that line.
The full resolution ladder
For every line, the engine works down four steps and stops at the first that answers:
That last step is worth remembering when troubleshooting: a line with no tax and no error usually means an unclassified product with Apply Default Tax switched off.
Rules with no profile — the catch-all
A Tax Rule can leave its Tax Profile blank. That makes it a catch-all — it isn’t tied to any product treatment. Catch-all rules are how the simplest setups avoid classifying every product: pair a single “standard VAT” catch-all rule with the Apply Default Tax flag on a product, and you get correct tax with no Tax Profile to maintain. This is the usual UK pattern, and it’s covered in Product Fiscal Profiles.
Real data: UK and Brazil tax profiles
| 🇬🇧 UK | Category | 🇧🇷 Brazil | Category | |
|---|---|---|---|---|
GB-STD-20 Standard | Standard Goods | BR-STD-GOODS Standard | Standard Goods | |
GB-RED-5 Reduced | Reduced Rate Goods | BR-IPI-GOODS Manufactured | Capital Goods | |
GB-ZERO Zero-Rated | Zero-Rated Goods | BR-REDUCED-GOODS Reduced | Reduced Rate Goods | |
GB-EXEMPT Exempt | Exempt Goods | BR-SERVICES Services (ISS) | Standard Services |
The UK’s four mirror its four VAT treatments one-for-one. Brazil’s separate goods from services (services attract ISS, not ICMS) and call out manufactured goods (which attract IPI) — the profile is how a product gets steered onto the right set of taxes.
Guardrails & setup
- Code is uppercase, no spaces — it’s the key seeding matches on. The two enforcing messages, verbatim: “Tax Profile Code cannot contain spaces. Use hyphens as separators (e.g., CA-STD-GOODS, BR-STD-GOODS, US-TAXABLE).” and “Tax Profile Code must be in UPPER CASE (e.g., CA-STD-GOODS, BR-STD-GOODS). Please correct the value entered.”
- Category is required — every profile must declare its treatment kind.
- Deactivate rather than delete. An inactive profile drops out of matching while past documents keep their context — the same discipline as everywhere else in the rulebook.
- Seeded per country. The Tax Seeding Wizard creates the country’s standard profiles; you link products to them via fiscal profiles, or use the default-tax flag for simple cases.
- Keep the set small. Profiles are treatments, not product categories — a country rarely needs more than a handful. If two profiles always match the same rules, they should be one profile.
Where to go next
- Party Tax Profiles — the party-side classification.
- Product Fiscal Profiles — how products carry a tax profile.
- Tax Rules — rules that match on tax profile.
- How Tax Calculates on a Document — profiles used during calculation.
Frequently asked questions
Tax Profile = the product (what’s being sold). Party Tax Profile = the business (who’s trading). A rule can use both — e.g. “standard goods (tax profile) sold to an end consumer (party profile).”
No. For multi-rate or multi-country setups, yes — classify each product via a fiscal profile. For simple single-rate setups (typical UK), skip it: set the product’s Apply Default Tax flag and use a catch-all rule. See Product Fiscal Profiles.
Through its Product Fiscal Profile — a junction record that ties a product to a Tax Profile, scoped by country and carrying classification codes (UK: none; India: HSN; Brazil: NCM). A line can also override the profile directly.
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