--- title: Tax Item Type description: Learn how to add tax items to invoices, PRs and POs for convenient tax management. --- [Skip to content](https://help.precoro.com/tax-item-type#main-content) [Contact us](https://help.precoro.com/kb-tickets/new?hsLang=en) [Customer portal](https://help.precoro.com/tickets-view?hsLang=en) [![Property 1=Default](https://help.precoro.com/hubfs/Property%201=Default.svg)](https://app.precoro.com/login) Open main navigation Close main navigation - [Contact us](https://help.precoro.com/kb-tickets/new) - [Customer portal](https://help.precoro.com/tickets-view) - [Contact Us](https://share.hsforms.com/1-5JilMA_Qv6AOSVjFtNhDg14slf) [Contact Us](https://share.hsforms.com/1-5JilMA_Qv6AOSVjFtNhDg14slf) Hi there! How can we help you today? - There are no suggestions because the search field is empty. 1. [Knowledge Base](https://help.precoro.com/?hsLang=en) 2. [Precoro Setup](https://help.precoro.com/precoro-setup?hsLang=en) 3. [Working with Items](https://help.precoro.com/precoro-setup?hsLang=en#working-with-items) # Tax Item Type ## Learn how to create and add tax items to your custom and standard POs, invoices, PRs and Service Orders. #### TABLE OF CONTENTS - [How to Create New Tax Items on the Item Management Page](https://help.precoro.com/tax-item-type#on-item-management-page) - [How to Create New Tax Items on the Document Page](https://help.precoro.com/tax-item-type#on-document-page) - [Main Operational Features of Tax Items](https://help.precoro.com/tax-item-type#main-features) ### How to Create New Tax Items on the Item Management Page To create a new tax item on the Item Management page: 1. Go to the **Item Management** module → **Item Management**. 2. Click the **Add Item** button → enter the required information. 3. In the Item Type field, select the **Tax** option. 4. Click **Save** to apply the changes. This item can be added to documents through the Catalog for future use (available for Invoices, POs, PRs, RFPs, and Service Orders). **💡 Please note:** You can add a tax-type item to the catalog and use it in the documents regardless of your company’s tax settings in Configuration. ### [![Add Item](https://help.precoro.com/hs-fs/hubfs/Add%20Item.png?width=670&height=317&name=Add%20Item.png)](https://help.precoro.com/hubfs/Add%20Item.png?hsLang=en) ### How to Create New Tax Items on the Document Page You can add a new tax item while creating standard or custom POs and invoices.  Make sure that the tax functionality is deactivated in **Configuration → Basic Settings → Document Setup → General Settings → Taxes.** [**![General Settings](https://help.precoro.com/hs-fs/hubfs/General%20Settings.png?width=670&height=281&name=General%20Settings.png)**](https://help.precoro.com/hubfs/General%20Settings.png?hsLang=en) Once deactivated, follow the steps below: 1. Click the **Add Tax** button in the created invoice or PO. 2. Fill out the required information. 3. Check the **Add to Catalog** box (optional) to save the item in the catalog with the corresponding tax type. 4. **Save** to apply the changes. [![add-tax](https://help.precoro.com/hs-fs/hubfs/add-tax.jpg?width=670&height=246&name=add-tax.jpg)](https://help.precoro.com/hubfs/add-tax.jpg?hsLang=en)   **💡Please note:** If you manually add a new item line using the **Add** button and enter the SKU and Name of an existing tax item from the Catalog, the system will recognize it as a tax-related expense and mark it with a tax icon in the document. [![Icon](https://help.precoro.com/hs-fs/hubfs/Icon-Feb-18-2025-12-02-28-6923-PM.png?width=670&height=198&name=Icon-Feb-18-2025-12-02-28-6923-PM.png)](https://help.precoro.com/hubfs/Icon-Feb-1.png?hsLang=en) As an alternative to creating tax items, you can add new taxes through Configuration. Learn more in [this guide](https://help.precoro.com/how-to-set-up-tax-rates?hsLang=en).  ### Main Operational Features of Tax Items **Tax items handling**: - Tax items are added as **individual lines** and [cannot be split in Service Orders.](https://help.precoro.com/how-to-create-invoices-and-receipts-for-service-orders?hsLang=en#Split-Lines-Functionality) - No additional taxes are calculated for tax items. The **“Tax %”** and **“Tax Sum”** columns always remain empty for them. - Tax items can be **free of charge** or have a **negative price**. - You can add an unlimited number of tax items to a document, as well as create a document with only tax items. - Tax items can be added to related Credit Notes. **Matching process**:  - Adding tax items to an invoice from a PO doesn't trigger the Matching process, even if the tolerance limit is exceeded. - Tax items added to the invoice aren't transferred to the related PO, either after invoice confirmation or after Matching is approved. They remain on the invoice only and are included in the invoice total, payments, and invoice reports, while the PO total reflects only the items it contains. This applies to manually created and AI-processed invoices alike. **Tip**: If you want the tax to appear on the PO, add it to the PO using **Add Tax** before creating the invoice. **Receiving**: - Tax items cannot be received, so they are automatically excluded from the list of items to receive when you create a receipt for a PO. - In Service Orders, the **“Can Be Received”** field is set to **No** by default. **PO completion:** - The Purchase Order is automatically completed if all the regular items are received (except for the non-receivable ones), invoiced, and paid (all items have to be paid, including the non-receivable ones). - You can manually complete a Purchase Order once all received items are paid, even if the receipt amount is less than the invoice total. - Documents containing only non-receivable items (like Tax and Shipping) will always have the **“Not Received”** status as these items do not require receiving.  To have the **“Partly Received”** or **“Received”** status, the document must contain at least one item that can be received. | ![Status 2](https://help.precoro.com/hs-fs/hubfs/Status%202.png?width=423&height=161&name=Status%202.png) | PO contains only non-receivable paid items. | | --- | --- | | [![Status 1](https://help.precoro.com/hs-fs/hubfs/Status%201.png?width=423&height=161&name=Status%201.png)](https://help.precoro.com/hubfs/Status%201.png?hsLang=en) | PO contains receivable and can include non-receivable items. All items are paid. | **AP Automation processing**: Here's how taxes are added in AI-processed invoices: - If taxes are disabled in your company in Configuration → Basic Settings, the tax will be added as a single tax item line. This item can be matched with a tax item saved in the catalog. - If taxes are enabled in your company: - When the recognized tax rate equals one of the existing taxes, this tax appears as tax % in the invoice. - If there is no matching tax rate, Precoro adds the total recognized tax amount as a separate Tax-type item. It helps keep invoice totals accurate when a supplier’s tax rate doesn't match your predefined taxes, so you spend less time correcting tax discrepancies manually. 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