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

# Configuring Tax Codes

Tax codes imply the Value Added Tax (VAT) rate applied to an expense.

Hence, you must specify the appropriate tax codes that are relevant for your business- this helps to apply the correct tax code to an expense recorded in Pleo.

* To set up tax codes using the **Taxes API**, see the [Tax Code API](/reference/tax-codes-overview).

* To set up tax codes in the Pleo application, mention the following details in the **Settings** > **Accounting** > **Setup** tab:

  | Columns  | Description                                                                            |
  | :------- | :------------------------------------------------------------------------------------- |
  | Type     | Defines the specific type allocated to the tax.                                        |
  | Name     | A specific name for the tax code.                                                      |
  | Code     | An internal identifier of the ERP/accounting system assigned to the specific tax type. |
  | Tax rate | The percentage of tax applied to an expense with this specific tax code.               |