Learn how Dext manages tax settings when publishing items to Xero. Understand how Dext extracts tax amounts, uses Xero tax rates, and how each publishing option affects the tax values sent to Xero.
How tax publishing works
When you publish an item to Xero, Dext automatically includes the correct tax information. It either sends the tax amount extracted from the document or calculates it using the tax rate applied to the item.
Using imported tax rates
You can use your imported tax rates in several ways:
Apply a tax rate manually – On the Item details page, select a tax rate, and Dext will calculate the tax amount based on the item’s net value.
Create supplier or customer rules – Set up rules so that every future item from that supplier or customer automatically uses the same tax rate.
Set a default tax rate – In your integration settings, choose a default tax rate to apply to all new items (unless an existing rule overrides it).
Important: Dext does not extract tax rates - only tax amounts. Instead, all tax rates are pulled directly from Xero during the integration process.
Showing your tax rate list
Once Xero is connected, Dext imports all the Tax Rates from your Xero account. You can show these rates on an item’s detail page by:
Going to Business settings > Connections in the left-hand sidebar.
Clicking Manage next to your Xero connection.
Enabling the Use tax list toggle (switch to Yes).
This enables the Tax dropdown on each item detail page, where you can select and apply any tax rate pulled from Xero.
Publishing tax data options
In Dext, you can decide whether Dext or Xero determines the tax amount when publishing items.
To configure this, go to Business settings > Connections > Manage (next to Xero) > Settings > Tax section.
You’ll find the following under Publishing tax data:
Allow Dext to decide (recommended)
Dext will always use the tax amount extracted from your document when publishing to Xero.
This means Xero will display the same tax amount Dext extracted, without recalculating or overriding it.
Allow Dext to decide with exceptions
When this option is selected, Dext will dictate the tax amount sent to Xero based on the tax amount extracted from your document.
However, in some cases, Xero’s own calculations will apply instead:
When the extracted tax amount in Dext is 0 - Xero will use the tax rate assigned to the item’s category (nominal code) to calculate the tax amount.
When the nominal code in Xero has a zero-rated tax rate - Xero will publish a 0.00 tax amount even if Dext extracted a positive amount.
In these exceptions, Xero’s tax logic overrides Dext’s extracted tax amount.
Allow Xero to calculate
Dext will extract the tax amount from your document, but when the item is published, Xero recalculates the tax.
This is the recommended option for non-tax-registered businesses.
Xero category tax default behaviour
Turn the Use supplier tax rates setting on if you want Dext to import and apply any tax rules set against your suppliers in Xero.
These rules override any extracted tax amount from documents. You can also edit or remove a supplier’s tax rule from the Suppliers page or at the item level if needed.
Tip: This setting is optional - enable it if you use consistent supplier tax rates in Xero.
Setting default tax codes and behaviour
You can configure default tax codes in Dext for both costs and sales. These defaults are not mandatory, but can ensure a tax rate is applied correctly.
Choosing default tax behaviour
From your integration settings, you can also select how Dext applies default tax codes using the dropdown under Xero category tax default behaviour:
Always use Dext default tax codes – Dext will apply the default tax codes you set, regardless of the Xero category.
Always use category tax code from Xero if applicable – Dext will prioritise the tax rate linked to the item’s category (nominal code) in Xero.
Use Dext default tax codes when category is ‘No tax’ – Dext will use its default tax codes only if the category in Xero has no tax rate assigned.
Default tax codes
Setting | Description |
Default tax for costs | The tax rate applied to cost items when publishing to Xero. |
Default tax code if no tax amount extracted (costs) | Applied when a cost item has no extracted tax amount. |
Default tax for sales | The tax rate applied to sales items when publishing to Xero. |
Default tax code if no tax amount extracted (sales) | Applied when a sales item has no extracted tax amount. |
These defaults are automatically set during Xero integration but can be customised at any time.
Summary
Setting | Purpose |
Publish tax data | Choose whether Dext or Xero calculates tax. |
Use tax list | Display Xero tax rates on item detail pages. |
Use supplier tax rates | Apply supplier-specific rules from Xero automatically. |
Default tax options | Define fallback tax codes and behaviour for costs and sales. |