> ## Documentation Index
> Fetch the complete documentation index at: https://docs.yorlet.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Tax rates

> Create reusable tax rates to apply to invoices, subscriptions and prices.

export const OverflowMenu = () => {
  return <span>overflow menu (•••)</span>;
};

Tax rates let you apply tax consistently across your charges. Once you have created a tax rate, you can apply it to invoice and subscription line items and to [prices](/billing/products), and it will be shown on the customer's invoice.

## Create a tax rate

To create a tax rate, follow these steps:

1. Navigate to the [Tax rates page](https://dashboard.yorlet.com/tax-rates) in the Dashboard.
2. Click **Create tax rate**, or press N on your keyboard.
3. Choose the **Type**: **VAT**, **GST**, **Sales tax** or **Custom**. If you choose **Custom**, enter a **Name** to show on customers' receipts and invoices.
4. Select the **Country** the tax rate applies to.
5. Enter the **Rate** as a percentage, and choose whether it is **Exclusive** or **Inclusive**.
6. Optionally add a **Description**.
7. Click **Create**.

### Inclusive and exclusive tax

* **Exclusive**: the tax is added on top of the line item amount.
* **Inclusive**: the line item amount already includes the tax.

## Apply a tax rate

When you add a line item to an [invoice](/billing/invoices/create-an-invoice) or a [subscription](/billing/subscriptions/create-a-subscription), use **Use tax rate** to select a tax rate for that item. You can also set a default tax rate on a [price](/billing/products) so it is applied automatically whenever the price is used.

## Archive a tax rate

Archiving keeps the tax rate for reporting but stops it being applied to new line items and prices.

To archive a tax rate, follow these steps:

1. Open the tax rate.
2. Use the <OverflowMenu /> and select **Archive**. Select **Activate** to restore it.