How to understand Tax Rule and Tax Category?

On a Purchase Order there is a field for

  • exactly one Tax Category and
  • exactly one Purchase Taxes and Charges Template.

A Tax Category is merely a named marker, has zero fields but may have many connections from other entities.

Every Purchase Taxes and Charges Template has a field for exactly one Tax Category.

An error is thrown if one attempts to specify the same Tax Category in more than one Purchase Taxes and Charges Template.

Referring to the documentation for Tax Rule

Setting a Tax Category allows applying multiple Tax Rules to a transaction* based on different factors.

… I tried to create two tax rules against one named Supplier, with all other fields blank …

  1. a Tax Rule specifying a value-added tax deduction template, and
  2. a Tax Rule specifying an income tax deduction template

… specifying the same Tax Category on both.

I got the error :

Tax Rule Conflicts with ACC-TAX-RULE-2024-00002

I understand this error to mean that a Purchase Order transaction can take parameters from exactly one Tax Rule.

In short, I see only 1 to 1 relations between these entities!


  1. Is it true that a Tax Category can apply “multiple Tax Rules to a transaction”?
  2. If so, where can I find a working example?

*my emphasis

$ bench version
erpnext 13.39.2
frappe 13.41.3

$ bench --version

$ lsb_release -a
Description:	Ubuntu 22.04.3 LTS