--- title: "Inclusive and Exclusive Item Taxes" space: "VunaPOS" url: "https://docs.navari.co.ke/vunapos/selling/taxes" updated: "2026-08-05" --- VunaPOS supports both inclusive and exclusive item tax calculation when ERPNext **Item Tax Templates** are used. ERPNext normally treats taxes from an Item Tax Template as exclusive, meaning the tax amount is calculated and added on top of the item’s basic rate. VunaPOS adds the **Item Prices Include Tax** option to the POS Profile so each POS setup can control how those item taxes should be interpreted. ## Requirements Before using item-level taxes in VunaPOS: 1. Create the required Item Tax Templates in ERPNext. 2. Assign the appropriate Item Tax Template to each item. 3. Add the relevant tax accounts and rates. 4. Open the POS Profile used by VunaPOS. 5. Decide whether the configured item prices already include tax. ## Item Prices Include Tax The **Item Prices Include Tax** checkbox is available on the POS Profile. Its behavior is: | Item Prices Include Tax | Tax Behaviour | | ----------------------- | --------------------------------------------------------------------------------------------------------- | | Checked | Item prices are treated as tax-inclusive. The tax amount is extracted from the item rate. | | Unchecked | Item prices are treated as tax-exclusive. The tax amount is calculated and added on top of the item rate. | This option applies when VunaPOS processes taxes defined through Item Tax Templates. ## Inclusive Taxes Enable **Item Prices Include Tax** when the selling price shown for an item already contains the tax amount. For example: ```text Item Rate: KES 116.00 VAT Rate: 16% ``` Because the tax is inclusive: ```text Net Amount: KES 100.00 Tax Included: KES 16.00 Grand Total: KES 116.00 ``` The customer pays the displayed item price. The tax is extracted from that amount instead of being added again. ### Configure Inclusive Taxes 1. Open **POS Profile**. 2. Select the profile used by VunaPOS. 3. Enable **Item Prices Include Tax**. 4. Save the POS Profile. 5. Confirm that the item has the correct Item Tax Template. 6. Reload VunaPOS before processing another sale. When the item is added to the cart, VunaPOS treats the item rate as the final tax-inclusive selling price. ## Exclusive Taxes Leave **Item Prices Include Tax** unchecked when the item rate does not already contain tax. For example: ```text Item Rate: KES 100.00 VAT Rate: 16% ``` Because the tax is exclusive: ```text Net Amount: KES 100.00 Tax Added: KES 16.00 Grand Total: KES 116.00 ``` The tax is calculated on top of the item’s basic rate. ### Configure Exclusive Taxes 1. Open **POS Profile**. 2. Select the profile used by VunaPOS. 3. Leave **Item Prices Include Tax** unchecked. 4. Save the POS Profile. 5. Confirm that the item has the correct Item Tax Template. 6. Reload VunaPOS before processing another sale. ## How VunaPOS Determines Tax Behaviour When an item has an Item Tax Template, VunaPOS checks the **Item Prices Include Tax** value on the active POS Profile. If the option is checked: - the item rate is treated as inclusive of tax - the tax amount is extracted from the rate - the grand total remains equal to the tax-inclusive item total If the option is unchecked: - the item rate is treated as exclusive of tax - the tax amount is calculated on top of the rate - the grand total increases by the calculated tax amount VunaPOS uses the active POS Profile consistently throughout the sale so that item display, cart totals, checkout totals, and the submitted invoice follow the same tax treatment. ## Cart and Checkout Display The cart and checkout page show the tax breakdown returned by the backend. For inclusive taxes, the tax may appear as: ```text Subtotal: KES 116.00 VAT 16% · Included: KES 16.00 Grand Total: KES 116.00 ``` For exclusive taxes, it may appear as: ```text Subtotal: KES 100.00 VAT 16% · Added: KES 16.00 Grand Total: KES 116.00 ``` The frontend displays the calculated values but does not independently calculate the official tax total. ## Mixed Items An invoice may contain several items with different Item Tax Templates. VunaPOS applies the tax rate associated with each item while using the POS Profile setting to determine whether the item prices are inclusive or exclusive. For example: ```text Item A: VAT 16% Item B: Zero-rated Item C: VAT 8% ``` When **Item Prices Include Tax** is enabled, applicable taxes are extracted from the item prices. When it is disabled, applicable taxes are added on top of the item rates. ## Changing the Setting Changing **Item Prices Include Tax** affects how VunaPOS interprets item prices for subsequent sales. After changing the option: 1. Save the POS Profile. 2. Reload VunaPOS. 3. Start a new sale. 4. Add a taxed item. 5. Review the cart totals before checkout. Do not change the tax interpretation in the middle of an active sale. > **Warning:** The item prices and POS Profile tax setting must agree. Enabling inclusive tax for prices that exclude tax will understate the final amount. Leaving it disabled for prices that already include tax will add the tax twice. ![](/files/2026-08-05 05-48-17.mp4) ## Common Problems ### Tax Is Being Added Twice **Cause** The item price already includes tax, but **Item Prices Include Tax** is not enabled. **Resolution** 1. Open the active POS Profile. 2. Enable **Item Prices Include Tax**. 3. Save the profile. 4. Reload VunaPOS. 5. Start a new sale and review the totals. ### Grand Total Is Lower Than Expected **Cause** **Item Prices Include Tax** may be enabled even though the configured item rates exclude tax. **Resolution** 1. Confirm how the item prices were entered. 2. Open the active POS Profile. 3. Disable **Item Prices Include Tax** if the rates exclude tax. 4. Reload VunaPOS and retry the sale. ### Item Tax Is Not Applied **Cause** The item may not have an Item Tax Template, or the template may not contain the expected tax account and rate. **Resolution** 1. Open the Item in ERPNext. 2. Confirm the Item Tax Template assignment. 3. Review the tax account and rate. 4. Add the item to a new VunaPOS sale. 5. Confirm the tax appears in the cart. ### Tax Display Differs From the Submitted Invoice **Cause** The active sale may have been created before the POS Profile or tax configuration changed. **Resolution** 1. Clear or hold the current sale. 2. Reload VunaPOS. 3. Start a new sale. 4. Add the item again. 5. Confirm that the cart and checkout totals match the submitted invoice.