Tax rates in Katana are applied to products and materials on Sales Orders and Purchase Orders to calculate the total price or cost of items on the order with taxes.

Purchase Prices, Sales Prices and all costs in Katana are recorded without taxes. Taxes are only relevant in Katana to display the correct total prices or costs on orders. This can be important for various reasons:

- For sending Sales Orders to your customers or creating invoices based on Sales Orders in Katana. When you create invoices based on Katana Sales Orders, you need to add taxes to the invoice and can get the tax information directly from Katana.

Note: Invoices cannot be created in Katana, but you can use Sales Orders as a basis for your invoices created outside Katana. 

- For sending Purchase Orders to your suppliers via printing or saving Katana orders to PDF, you probably need to display the totals on the orders with taxes.

 - If you are syncing your orders with e-commerce channels or accounting platforms, it is easier to reconcile the orders between systems when the totals match.


Creating and editing Tax rates

Tax rates can be created and edited in "Settings" -> "Tax rates". Here you can add new tax rates, edit or delete existing tax rates.

These tax rates can be chosen for items on your Sales Orders and Purchase Orders. The first Tax rate on the list is your default Tax rate that is added to items on orders by default. You can drag-and-drop the order of tax rates.