> ## Documentation Index
> Fetch the complete documentation index at: https://sailia-mintlify-docs-reorg-1776046906.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Taxes and VAT

> Configure tax rates and VAT settings for your bookings, products, and invoices.

Sailia supports tax and VAT configuration through accounting categories. When you connect a bookkeeping tool like [Xero](/integrations/accounting-sync), each product category is mapped to a tax rate, ensuring your invoices and financial reports reflect the correct tax amounts.

## How taxes work in Sailia

Tax rates are not applied directly to individual products. Instead, you assign products to **accounting categories**, and each category has an associated VAT rate and Xero account code. This keeps your tax configuration centralized and consistent.

| Concept                 | Description                                                                     |
| ----------------------- | ------------------------------------------------------------------------------- |
| **Accounting category** | A label you create (e.g. "Activity income", "Equipment hire", "Food and drink") |
| **VAT rate**            | The tax percentage assigned to the category (e.g. 20%, 5%, 0%)                  |
| **Xero tax type**       | The Xero tax rate name that the category maps to                                |
| **Xero account code**   | The Xero account where revenue is posted                                        |

## Set up accounting categories

<Steps>
  <Step title="Open accounting settings">
    Navigate to **Settings** > **Integrations** > **Xero** and open the accounting categories section.
  </Step>

  <Step title="Create a category">
    Add a new accounting category with a name, VAT rate, Xero tax type, and Xero account code.
  </Step>

  <Step title="Assign products to categories">
    For each activity, shop product, membership, or activity pass, select the appropriate accounting category in its settings.
  </Step>
</Steps>

## Products that support accounting categories

| Product type        | Where to assign                                                                                                    |
| ------------------- | ------------------------------------------------------------------------------------------------------------------ |
| **Activities**      | Activity settings page                                                                                             |
| **Shop products**   | Product details page                                                                                               |
| **Memberships**     | Membership plan settings                                                                                           |
| **Activity passes** | Pass settings page                                                                                                 |
| **Gift cards**      | Mapped separately in Xero settings — see [gift card mapping](/integrations/accounting-sync#set-up-accounting-sync) |

## VAT on invoices

When [Xero accounting sync](/integrations/accounting-sync) is enabled, each Stripe payout generates a Xero invoice that includes:

* Line items grouped by accounting category
* The correct VAT rate on each line
* Stripe fees mapped to a dedicated account code
* A CSV attachment with the full transaction breakdown

<Note>
  If a product does not have an accounting category assigned, its revenue still appears in Xero but without specific tax categorization. Assign categories to all products for accurate tax reporting.
</Note>

## Gift Aid for donations

If you accept [donations](/payments/donations) and your organization is a UK-registered charity, you can enable **Gift Aid** to reclaim an additional 25% from HMRC on qualifying donations. Gift Aid eligibility is tracked per donation and included in your [donation exports](/payments/donations#exporting-donations).

## Exporting tax data

You can export transaction data for tax reporting from the [financial dashboard](/payments/reporting):

* **Payout exports** include fee breakdowns and net amounts
* **Basket exports** include individual line items with product categories
* **Donation exports** include Gift Aid status for each donation

These exports are available as CSV files that you can provide to your accountant or import into bookkeeping software.

## Troubleshooting

<AccordionGroup>
  <Accordion title="Products showing incorrect VAT rate in Xero">
    Check the accounting category assigned to the product. Open the category settings and verify the VAT rate and Xero tax type are correct. Changes apply to future payouts — existing invoices in Xero are not retroactively updated.
  </Accordion>

  <Accordion title="Missing tax breakdown on Xero invoices">
    Ensure all products have an accounting category assigned. Products without a category are grouped as uncategorized revenue. Assign categories and the next payout sync will include the correct breakdown.
  </Accordion>
</AccordionGroup>

## Related guides

<Columns cols={2}>
  <Card title="Xero accounting sync" icon="arrows-rotate" href="/integrations/accounting-sync">
    Connect Xero and map accounting categories.
  </Card>

  <Card title="Financial reporting" icon="chart-bar" href="/payments/reporting">
    Export transaction data for tax and compliance.
  </Card>
</Columns>