Perk can support multiple types of tax, such as VAT and other sales taxes, self-assessed and non-recoverable taxes, etc. so that tax amounts can be exported to the finance system as applicable.
Perk is able to:
- Detect tax rates and capture tax information.
- Associate the right tax rate to the category.
- Check that VAT-deductible expenses have all required tax information.
- Send applicable tax amount and tax rate information to the finance system for each transaction.
- Flag whether the reverse charge mechanism applies and send the corresponding information.
You use tax rates (i.e. VAT rates) to determine tax amounts in expenses and invoices. Tax rates can be selected in the expense form (if applicable) or in invoice line items. This enables the Finance team to review each tax entry in Perk and approve, amend or reject accordingly.
Caution: Perk does not support 100% tax rates.
For reverse charge VAT handling, Perk exports the necessary information for processing reverse charges in your finance and accounting system. See Reverse charge VAT handling in Perk.
Note on managing foreign VAT reclaims: If you are handling foreign VAT reclaims, Perk allows you to streamline the process for both internal handling and provider-based reclaims. See Foreign VAT reclaims in Perk.
Enable tax rates
To enable tax, go to Account > Companies, select the company. Scroll down and click View spend settings. In Spend settings, turn on the Enable tax toggle switch.
For expenses, you can determine the people who can see the tax section in the form and determine whether tax applies to specific expense types:
| Setting | Description |
|---|---|
| Enable tax section for employees | By checking this box, employees can view the VAT section in the expense report and if necessary, make changes to it if the tax rate hasn’t been extracted correctly by the system. |
| Enable tax section for approvers | By checking this box, approvers can view and verify the VAT information associated with transactions or expenses. |
| Enable tax for mileage expenses |
By checking this box, people can enter VAT information for mileage expenses, which refer to costs associated with using a personal vehicle for business purposes. In addition, Perk can automatically calculate tax amounts for mileage based on the tax rate selected. |
| Enable tax for per diems | By checking this box, people can enter VAT information for per diems. In addition, Perk can automatically calculate tax amounts for per diems based on the tax rate selected. |
Note: When the Enable VAT section for employees field is disabled, people are unable to view tax information for mileage expenses or per diems even if it is enabled, as it prevents the section from being visible in all cases and is only visible to financial reviewers and approvers.
After you have enabled this module, you need to configure tax rates for the legal entities in which you want to reclaim taxes.
Set up tax rates
Tax rates are needed in Perk to handle all applicable tax rates for each jurisdiction where your company is VAT-registered – whether domestically or abroad – and is required to report VAT to the corresponding tax authority.
Perk’s AI automatically matches the correct tax rate with the detected VAT amounts on each expense. These suggested matches are reviewed during finance review to ensure accuracy before the data is exported to your finance system for reporting and bookkeeping.
Your organization is set up with pre-configured tax rates for each company (legal entity) based on the respective country. These rates serve as a starting point and must be reviewed and adjusted by your finance or tax team to ensure compliance with your company’s specific VAT reporting obligations.
You can set up and configure tax rates in Perk:
Caution: Tax rates have a global scope. In other words, they are used by invoice processing and expense processing and cannot be restricted to a specific module. Bear this in mind if you set up advanced tax rates for invoices.
Add a new tax rate
You can set up tax rates if you reclaim taxes for one or multiple companies. To configure tax rates, go to Settings > Cost management > Tax rates.
Before you start, choose the applicable company entity under the Company dropdown field for which you want to set up tax rates. Click + Add new Tax rate to start configuring a new tax rate.
| Field | Description |
|---|---|
| Name | The name of the tax rate. For example, 2.5% reduced rate. |
| VAT code (ERP) | The applicable VAT code for your finance system. Enter ”na” if this is not needed. |
| Country | The country in which the tax rate is applicable. Only one country can be chosen. If you want to configure a certain tax rate for several countries, you need to add it for each country. |
| Description | Include a description for the tax rate if applicable. |
| Tax category | Type of tax rate. This applies to advanced tax rates for invoices only. |
| Valid from | The date from which this tax rate is applicable. |
| Valid until | The date until which this tax rate is applicable. |
| Priority (the higher the number, the higher the priority) | Prioritize the tax rate by entering a number. A higher number indicates a higher priority. This enables Perk’s AI to automatically assign a tax rate to an expense report. |
| Account (ERP) |
The tax account in your finance system where tax is to be booked. Enter ”na” if this is not applicable.
If you use advanced tax components for invoices, you can omit this field as the tax account is taken from the input tax account field in the tax component. However, you use the same tax rate for expenses and invoices, then you must enter the value in both the Account (ERP) and Input tax account fields. |
| Configure tax rate components for invoices | Enables advanced tax rates for invoices. |
| Total tax rate (%) | Rate (in %) Perk’s AI model uses to match the tax rate with that extracted from the expense or invoice. |
After you filled in all fields to define your tax rate, click on Activate to directly activate it or click on Save to save your changes and activate the tax rate at a later point in time.
Import multiple tax rates via CSV
To import multiple tax rates simultaneously, click Import file in the top right corner of your screen and a window pops up where you can download an example CSV file.
The import file can support up to 150 items per upload. If you want to import more than 150 tax codes, split your import file. Perk supports CSV files with UTF-8, UTF-16, and ISO/IEC 8859-1:1998 (Latin1) encoding. Optional columns can be omitted and additional columns are ignored
Once you’ve entered all required data in the CSV file, click Import file in the top right corner of your screen once again and select the company entity you would like to apply your changes to. Next, click Choose file to upload your CSV file or use the drag-and-drop function to drag the file directly into the field.
To finish this process, click Start import.
Tax rate import file specifications
| Column | Description |
|---|---|
| id | The unique identifier for the VAT rate, which will be automatically generated if you leave this field empty |
| name | The name of the VAT rate. For example, 2.5% Reduced Rate |
| account | The tax account in your ERP system on which the VAT will be booked. Insert “na” if this is not applicable |
| code | The applicable VAT code for your ERP system. Insert “na” if this is not needed |
| rate | This is the rate (in %) Perk’s AI model will extract from the receipt or invoice |
| country | The two-letter ISO country code for which the VAT rate is applicable. For example, CH for Switzerland |
| priority (optional) | Prioritize the VAT rate by entering a number. A higher number indicates a higher priority. This enables Perk’s AI to automatically assign a VAT rate to an expense report |
| description (optional) | Include a description for the VAT rate if applicable |
Edit a tax rate
If you need to change the details of a tax rate, click the corresponding tax rate in the table. You can filter the tax rates according to their status with the Active, Inactive, and Draft Status filters.
If you need to add a temporary tax rate, you should leave the previous rate active and add the temporary rate as an additional tax rate.
Advanced tax rate setup with global tax rates for expenses
Tax rates are global for the entire company and not restricted to a specific module (i.e. only invoices or only expenses).
If the company plans to use Advanced tax setup for invoices to track self-assessed and other types of tax, but wants to set up a single tax rate for this purpose for both expenses and invoices, the tax rate that will be considered for expenses is determined by the Total tax rate (%) field.
The Total tax rate is determined as the sum of all supplier-assessed tax components.
For example, you want to set up a tax rate of 21% for use in both expenses and invoices, but also include a self-assessed tax rate of 24%. You configure this as:
| Assessment type | Rate (%) |
|---|---|
| Supplier | 21 |
| Self | 24 |
In the expense, when people select the tax rate and enter the gross amount, Perk calculates the tax amount based on the Total tax rate (i.e. sum of supplier assessed taxes):