Regimes, Taxes, and Rates
Tax configuration in FTX follows a three-level hierarchy: regimes define the tax framework for a country, taxes define the individual tax types within a regime, and rates define the percentage and classification for each tax.
Tax regimes
A tax regime represents a country's tax framework. Each regime has a unique code and is linked to a country. Only one regime can exist per country within a tenant.
The system seeds three regimes:
| Regime code | Description | Country |
|---|---|---|
NZ_GST | New Zealand Goods and Services Tax | NZ |
AU_GST | Australian Goods and Services Tax | AU |
UK_VAT | United Kingdom Value Added Tax | GB |
The applicable regime for a transaction is resolved automatically from the organisation's legal entity country.
Taxes
A tax is a specific tax type within a regime. Each tax has a unique code scoped to its regime.
| Regime | Tax code | Description |
|---|---|---|
NZ_GST | GST | Goods and Services Tax |
AU_GST | GST | Goods and Services Tax |
UK_VAT | VAT | Value Added Tax |
Tax rates
A tax rate defines the percentage charged for a given tax and classification combination. Rates can vary by:
- Tax classification code — identifies the type of supply (e.g.
STANDARD,ZERO,EXEMPT,REDUCED) - Effective date range — rates can change over time with
effective_start_dateandeffective_end_date - Default flag — one rate per tax can be marked as the default, used when a transaction line has no explicit classification
- Recoverability — for AP transactions, whether the tax can be claimed back and what percentage is recoverable
Seeded rates
| Regime | Classification | Rate | Default | Recoverable | Recovery % |
|---|---|---|---|---|---|
| NZ GST | STANDARD | 15.00% | Yes | Yes | 100% |
| NZ GST | ZERO | 0.00% | No | No | 0% |
| NZ GST | EXEMPT | 0.00% | No | No | 0% |
| AU GST | STANDARD | 10.00% | Yes | Yes | 100% |
| UK VAT | STANDARD | 20.00% | Yes | Yes | 100% |
| UK VAT | REDUCED | 5.00% | No | Yes | 100% |
| UK VAT | ZERO | 0.00% | No | No | 0% |
Rate fields
| Field | Purpose |
|---|---|
| tax_classification_code | Identifies the supply type — determines which rate applies |
| percentage_rate | The tax percentage (0–100) |
| effective_start_date | When this rate becomes active |
| effective_end_date | When this rate expires (null = open-ended) |
| default_flag | Whether this rate is used when no classification is specified on a line |
| recoverable_flag | Whether the tax can be recovered (AP only) |
| recovery_rate_percentage | What percentage of the tax is recoverable (0–100) |
Tax classification codes
Classification codes are the key to flexible tax treatment. By setting a tax_classification_code on an AR or AP transaction line, you control which rate is applied:
STANDARD— the default rate (e.g. 15% GST in NZ)ZERO— zero-rated supply (tax is calculated at 0%)EXEMPT— exempt supply (no tax applies)REDUCED— a reduced rate (e.g. 5% VAT in the UK)
When no classification code is set on a line, the system uses the rate marked with default_flag = TRUE.
Regime resolution
The tax regime for a transaction is resolved through the organisation hierarchy:
- The transaction header's organisation is looked up
- The organisation's default legal entity is found via business unit usages
- The legal entity's country code determines the regime
This means all transactions within an organisation automatically use the correct country's tax rules.
Further reading
- Tax Calculation — how these rates are applied to AR and AP transactions
- Account Derivation — how tax accounts are derived using the
TAX_RATEsource