Tax Inclusive Pricing in SuiteTax
Use the Tax Inclusive Pricing feature to work with tax-inclusive prices (TIP) or tax-exclusive prices (TEP) on supported SuiteTax transactions.
To enable the Tax Inclusive Pricing feature, go to Setup > Company > Enable Features > Tax, and check the Tax Inclusive Pricing box. After you enable the feature, you will see the Prices Include Tax box on transactions.
By enabling the feature, you can maintain both price types and determine which pricing model NetSuite uses. NetSuite sources the matching price type for each line and applies that model to pricing, calculations, and displayed amounts.
Tax Inclusive Pricing supports sales, purchases, pricing settings, discounts, shipping, and handling.
In the TIP mode on transaction, the item price includes tax and appears in the Gross Amount field. In the TEP mode, the item price does not include tax and appears in the Amount field as a net price.
Benefits of Using the Tax Inclusive Pricing Feature
When you use Tax Inclusive Pricing, you can:
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Maintain both tax-inclusive and tax-exclusive prices.
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Switch transaction pricing behavior between TIP and TEP.
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Source the relevant price type on supported transaction lines.
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Apply discounts, shipping, and handling with results aligned to the selected pricing mode.
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Maintain related prices through price levels, quantity pricing schedules, and mass update flows.
Using Tax Inclusive and Tax Exclusive Prices
Tax Inclusive Pricing uses the Prices Include Tax box as the transaction-level switch between TIP and TEP. When the box is checked, NetSuite treats prices on the transaction as tax inclusive. When the box is not checked, NetSuite treats prices on the transaction as tax exclusive.
For example, an item can have both a tax-exclusive price and a tax-inclusive price. If you add the item to a transaction where Prices Include Tax is not checked, NetSuite uses the tax-exclusive price and displays it in the Amount field. If you add the same item to a transaction where Prices Include Tax is checked, NetSuite uses the tax-inclusive price and displays it in the Gross Amount field.
For regular tax types, NetSuite calculates the net amount in the TIP mode as the gross amount minus tax. For example, if the gross amount is 120 and the tax rate is 20%, NetSuite treats 120 as the full price including tax. NetSuite then separates that amount into a net amount of 100 and tax of 20. The Summary box shows Subtotal as the net amount, Tax Total as the tax amount, and Total as Subtotal plus tax.
If a line does not have the relevant TIP or TEP price, the user can provide the relevant amount manually. If required prices are still missing when taxes are previewed or the transaction is saved, NetSuite prevents the action.
Working with Supported Transactions
Tax Inclusive Pricing applies to all taxable transactions. The selected Prices Include Tax value is also respected during supported transformations.
For example, if a sales order with TIP enabled is transformed to an invoice, the invoice also has TIP enabled. The same behavior applies to supported purchase transformations, such as a purchase order transformed to a bill.
Bills created from item receipts do not support TIP when the Use Purchase Order Rate on Bills preference is disabled. For more information, see Known Limitations of the Tax Inclusive Pricing Feature.
NetSuite also sends the relevant transaction amounts and TIP status for tax calculation.
Maintaining TIP and TEP Prices
You can maintain both TIP and TEP values on item, customer and vendor pricing setups. You can also maintain prices using different currencies where available. Customer pricing supports both price types, and NetSuite sources the relevant value based on the transaction pricing mode.
For purchases, the TIP price is reflected in the Tax Inclusive Purchase Price field. This price is used as the purchase price including tax and is populated on the related transaction when the Prices Include Tax box is checked.
Price levels can apply to TEP, TIP, or both. When price levels update item records, the source distinguishes between updating tax-exclusive prices and tax-inclusive prices.
Quantity pricing schedules update both TEP and TIP. They don't let you update only TEP prices or only TIP prices separately.
You can also maintain TIP and TEP prices through mass update flows. Depending on the update, NetSuite can update tax-exclusive prices, tax-inclusive prices, or both. For TIP updates based on average cost or most recent cost, an estimated tax rate should be used to calculate the tax-inclusive price by applying the estimated tax to the cost amount. If the estimated tax rate is blank, NetSuite treats it as 0%.
Discounts, Shipping, and Handling
Discounts follow the transaction pricing mode. For TIP, the discount value is considered gross. For TEP, the discount value is considered net.
Shipping and handling also follow the transaction pricing mode. In TEP, shipping and handling costs are considered net amounts. In TIP, shipping and handling costs are considered full prices including tax. When a transaction is in TIP mode, the shipping and handling labels indicate that the displayed values are gross values, such as Gross Shipping Cost and Gross Handling Cost.
Discount, shipping, and handling items have one price, with no separate TIP and TEP price on the item record. Whether the discount amount is treated as net or gross depends on the Prices Include Tax setting on the transaction.
Known Limitations of the Tax Inclusive Pricing Feature
Some features and combinations aren't supported with Tax Inclusive Pricing:
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Tax Inclusive Pricing is not supported on custom transactions.
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TIP fields customization is not supported.
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Update Prices on memorized transactions is not supported.
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Advanced Pricing is incompatible with TIP.
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Time Tracking is incompatible with TIP.
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TIP is not supported for bills created from item receipts when the Use Purchase Order Rate on Bills preference is disabled.
Note:When you create a bill from an item receipt, Tax Inclusive Pricing will not be preserved if the Use Purchase Order Rate on Bills preference is disabled. In this case, the bill uses tax-exclusive pricing and sources the net amount from the item receipt. To retain tax-inclusive pricing, enable Use Purchase Order Rate on Bills under Setup > Accounting > Accounting Preferences > Order Management, or adjust the pricing mode and amounts on the bill manually.
The TIP calculation is supported by the SuiteTax Engine. If you are using another tax engine, you should consult the relevant provider for more details.
Reverse charge combined with Post To Item Cost is not supported for purchases with TIP. If one or more lines are subject to reverse charge in combination with Post To Item Cost, the transaction can't use tax-inclusive pricing for that combination.