diff --git a/app/Http/Controllers/ExpenseController.php b/app/Http/Controllers/ExpenseController.php
index cc850cbf3272..e159b268f22c 100644
--- a/app/Http/Controllers/ExpenseController.php
+++ b/app/Http/Controllers/ExpenseController.php
@@ -253,7 +253,7 @@ class ExpenseController extends BaseController
             'customLabel1' => Auth::user()->account->custom_vendor_label1,
             'customLabel2' => Auth::user()->account->custom_vendor_label2,
             'categories' => ExpenseCategory::whereAccountId(Auth::user()->account_id)->withArchived()->orderBy('name')->get(),
-            'taxRates' => TaxRate::scope()->orderBy('name')->get(),
+            'taxRates' => TaxRate::scope()->whereIsInclusive(false)->orderBy('name')->get(),
         ];
     }
 
diff --git a/app/Http/Controllers/InvoiceController.php b/app/Http/Controllers/InvoiceController.php
index a04f32471d71..5c92f4117c3e 100644
--- a/app/Http/Controllers/InvoiceController.php
+++ b/app/Http/Controllers/InvoiceController.php
@@ -328,7 +328,11 @@ class InvoiceController extends BaseController
         $defaultTax = false;
 
         foreach ($rates as $rate) {
-            $options[$rate->rate . ' ' . $rate->name] = $rate->name . ' ' . ($rate->rate+0) . '%';
+            $name = $rate->name . ' ' . ($rate->rate+0) . '%';
+            if ($rate->is_inclusive) {
+                $name .= ' - ' . trans('texts.inclusive');
+            }
+            $options[($rate->is_inclusive ? '1 ' : '0 ') . $rate->rate . ' ' . $rate->name] = $name;
 
             // load default invoice tax
             if ($rate->id == $account->default_tax_rate_id) {
@@ -342,7 +346,7 @@ class InvoiceController extends BaseController
                 if (isset($options[$key])) {
                     continue;
                 }
-                $options[$key] = $rate['name'] . ' ' . $rate['rate'] . '%';
+                $options['0 ' . $key] = $rate['name'] . ' ' . $rate['rate'] . '%';
             }
         }
 
diff --git a/app/Http/Controllers/ProductController.php b/app/Http/Controllers/ProductController.php
index e9ab8dd005a8..3dd650d5a5fd 100644
--- a/app/Http/Controllers/ProductController.php
+++ b/app/Http/Controllers/ProductController.php
@@ -74,7 +74,7 @@ class ProductController extends BaseController
 
         $data = [
           'account' => $account,
-          'taxRates' => $account->invoice_item_taxes ? TaxRate::scope()->get(['id', 'name', 'rate']) : null,
+          'taxRates' => $account->invoice_item_taxes ? TaxRate::scope()->whereIsInclusive(false)->get(['id', 'name', 'rate']) : null,
           'product' => $product,
           'entity' => $product,
           'method' => 'PUT',
@@ -94,7 +94,7 @@ class ProductController extends BaseController
 
         $data = [
           'account' => $account,
-          'taxRates' => $account->invoice_item_taxes ? TaxRate::scope()->get(['id', 'name', 'rate']) : null,
+          'taxRates' => $account->invoice_item_taxes ? TaxRate::scope()->whereIsInclusive(false)->get(['id', 'name', 'rate']) : null,
           'product' => null,
           'method' => 'POST',
           'url' => 'products',
diff --git a/app/Models/TaxRate.php b/app/Models/TaxRate.php
index f041c735d989..f9c25afc389c 100644
--- a/app/Models/TaxRate.php
+++ b/app/Models/TaxRate.php
@@ -18,7 +18,8 @@ class TaxRate extends EntityModel
      */
     protected $fillable = [
         'name',
-        'rate'
+        'rate',
+        'is_inclusive',
     ];
 
     /**
diff --git a/app/Ninja/Datatables/TaxRateDatatable.php b/app/Ninja/Datatables/TaxRateDatatable.php
index 3e16aba9ee19..4cc763d87ea4 100644
--- a/app/Ninja/Datatables/TaxRateDatatable.php
+++ b/app/Ninja/Datatables/TaxRateDatatable.php
@@ -20,6 +20,12 @@ class TaxRateDatatable extends EntityDatatable
                 function ($model) {
                     return $model->rate . '%';
                 }
+            ],
+            [
+                'type',
+                function ($model) {
+                    return $model->is_inclusive ? trans('texts.inclusive') : trans('texts.exclusive');
+                }
             ]
         ];
     }
diff --git a/app/Ninja/Repositories/TaxRateRepository.php b/app/Ninja/Repositories/TaxRateRepository.php
index f737256e85bf..52f229afd9af 100644
--- a/app/Ninja/Repositories/TaxRateRepository.php
+++ b/app/Ninja/Repositories/TaxRateRepository.php
@@ -16,7 +16,13 @@ class TaxRateRepository extends BaseRepository
         return DB::table('tax_rates')
                 ->where('tax_rates.account_id', '=', $accountId)
                 ->where('tax_rates.deleted_at', '=', null)
-                ->select('tax_rates.public_id', 'tax_rates.name', 'tax_rates.rate', 'tax_rates.deleted_at');
+                ->select(
+                    'tax_rates.public_id',
+                    'tax_rates.name',
+                    'tax_rates.rate',
+                    'tax_rates.deleted_at',
+                    'tax_rates.is_inclusive'
+                );
     }
 
     public function save($data, $taxRate = null)
@@ -29,7 +35,7 @@ class TaxRateRepository extends BaseRepository
         } else {
             $taxRate = TaxRate::createNew();
         }
-        
+
         $taxRate->fill($data);
         $taxRate->save();
 
diff --git a/app/Ninja/Transformers/TaxRateTransformer.php b/app/Ninja/Transformers/TaxRateTransformer.php
index 3b0f5ee19978..07b8aa565ad0 100644
--- a/app/Ninja/Transformers/TaxRateTransformer.php
+++ b/app/Ninja/Transformers/TaxRateTransformer.php
@@ -13,6 +13,7 @@ class TaxRateTransformer extends EntityTransformer
          * @SWG\Property(property="name", type="string", example="GST")
          * @SWG\Property(property="account_key", type="string", example="asimplestring", readOnly=true)
          * @SWG\Property(property="rate", type="float", example=17.5)
+         * @SWG\Property(property="is_inclusive", type="boolean", example=false)
          * @SWG\Property(property="updated_at", type="date-time", example="2016-01-01 12:10:00")
          * @SWG\Property(property="archived_at", type="date-time", example="2016-01-01 12:10:00")
          */
@@ -23,8 +24,9 @@ class TaxRateTransformer extends EntityTransformer
             'id' => (int) $taxRate->public_id,
             'name' => $taxRate->name,
             'rate' => (float) $taxRate->rate,
+            'is_inclusive' => (bool) $taxRate->is_inclusive,
             'updated_at' => $this->getTimestamp($taxRate->updated_at),
             'archived_at' => $this->getTimestamp($taxRate->deleted_at),
         ]);
     }
-}
\ No newline at end of file
+}
diff --git a/database/migrations/2017_01_01_214241_add_inclusive_taxes.php b/database/migrations/2017_01_01_214241_add_inclusive_taxes.php
new file mode 100644
index 000000000000..10102c283a82
--- /dev/null
+++ b/database/migrations/2017_01_01_214241_add_inclusive_taxes.php
@@ -0,0 +1,60 @@
+<?php
+
+use Illuminate\Database\Schema\Blueprint;
+use Illuminate\Database\Migrations\Migration;
+
+class AddInclusiveTaxes extends Migration
+{
+    /**
+     * Run the migrations.
+     *
+     * @return void
+     */
+    public function up()
+    {
+        Schema::table('tax_rates', function($table)
+        {
+            $table->boolean('is_inclusive')->default(false);
+        });
+
+        Schema::table('companies', function ($table)
+        {
+			$table->enum('bluevine_status', ['ignored', 'signed_up'])->nullable();
+		});
+
+        DB::statement('UPDATE companies
+            LEFT JOIN accounts ON accounts.company_id = companies.id AND accounts.bluevine_status IS NOT NULL
+            SET companies.bluevine_status = accounts.bluevine_status');
+
+        Schema::table('accounts', function($table)
+        {
+            $table->dropColumn('bluevine_status');
+            $table->text('bcc_email')->nullable();
+        });
+
+    }
+
+    /**
+     * Reverse the migrations.
+     *
+     * @return void
+     */
+    public function down()
+    {
+        Schema::table('tax_rates', function($table)
+        {
+            $table->dropColumn('is_inclusive');
+        });
+
+        Schema::table('companies', function($table)
+        {
+            $table->dropColumn('bluevine_status');
+        });
+
+        Schema::table('accounts', function ($table)
+        {
+			$table->enum('bluevine_status', ['ignored', 'signed_up'])->nullable();
+            $table->dropColumn('bcc_email');
+		});
+    }
+}
diff --git a/resources/lang/en/texts.php b/resources/lang/en/texts.php
index 59ac0f23f28c..db754ea1773c 100644
--- a/resources/lang/en/texts.php
+++ b/resources/lang/en/texts.php
@@ -2291,7 +2291,9 @@ $LANG = array(
     'iphone_app_message' => 'Consider downloading our :link',
     'iphone_app' => 'iPhone app',
     'logged_in' => 'Logged In',
-    'switch_to_primary' => 'Switch to your primary company (:name) to manage your plan.'
+    'switch_to_primary' => 'Switch to your primary company (:name) to manage your plan.',
+    'inclusive' => 'Inclusive',
+    'exclusive' => 'Exclusive',
 
 );
 
diff --git a/resources/views/accounts/localization.blade.php b/resources/views/accounts/localization.blade.php
index 737088460da5..fecfb8086a6b 100644
--- a/resources/views/accounts/localization.blade.php
+++ b/resources/views/accounts/localization.blade.php
@@ -34,7 +34,6 @@
                         trans('texts.currency_symbol') . ': <span id="currency_symbol_example"/>' => array('name' => 'show_currency_code', 'value' => 0),
                         trans('texts.currency_code') . ': <span id="currency_code_example"/>' => array('name' => 'show_currency_code', 'value' => 1),
                     ])->inline()
-                        ->check('timer')
                         ->label('&nbsp;')
                         ->addGroupClass('currrency_radio') !!}
                 <br/>
diff --git a/resources/views/accounts/tax_rate.blade.php b/resources/views/accounts/tax_rate.blade.php
index 5889c7aecb96..57ed0245ae12 100644
--- a/resources/views/accounts/tax_rate.blade.php
+++ b/resources/views/accounts/tax_rate.blade.php
@@ -1,6 +1,6 @@
 @extends('header')
 
-@section('content') 
+@section('content')
   @parent
 
   @include('accounts.nav', ['selected' => ACCOUNT_TAX_RATES])
@@ -21,15 +21,24 @@
 
   @if ($taxRate)
     {{ Former::populate($taxRate) }}
+    {{ Former::populateField('is_inclusive', intval($taxRate->is_inclusive)) }}
   @endif
 
   {!! Former::text('name')->label('texts.name') !!}
   {!! Former::text('rate')->label('texts.rate')->append('%') !!}
 
+  {!! Former::radios('is_inclusive')->radios([
+          trans('texts.exclusive') => array('name' => 'is_inclusive', 'value' => 0),
+          trans('texts.inclusive') => array('name' => 'is_inclusive', 'value' => 1),
+      ])->inline()
+        ->check(0)
+        ->label('type') !!}
+
+
   </div>
   </div>
 
-  {!! Former::actions( 
+  {!! Former::actions(
       Button::normal(trans('texts.cancel'))->large()->asLinkTo(URL::to('/settings/tax_rates'))->appendIcon(Icon::create('remove-circle')),
       Button::success(trans('texts.save'))->submit()->large()->appendIcon(Icon::create('floppy-disk'))
   ) !!}
@@ -44,4 +53,4 @@
 
   </script>
 
-@stop
\ No newline at end of file
+@stop
diff --git a/resources/views/accounts/tax_rates.blade.php b/resources/views/accounts/tax_rates.blade.php
index add364c23595..8d1e327e97fe 100644
--- a/resources/views/accounts/tax_rates.blade.php
+++ b/resources/views/accounts/tax_rates.blade.php
@@ -65,12 +65,13 @@
       ->addColumn(
         trans('texts.name'),
         trans('texts.rate'),
+        trans('texts.type'),
         trans('texts.action'))
       ->setUrl(url('api/tax_rates/'))
       ->setOptions('sPaginationType', 'bootstrap')
       ->setOptions('bFilter', false)
       ->setOptions('bAutoWidth', false)
-      ->setOptions('aoColumns', [[ "sWidth"=> "40%" ], [ "sWidth"=> "40%" ], ["sWidth"=> "20%"]])
+      ->setOptions('aoColumns', [[ "sWidth"=> "25%" ], [ "sWidth"=> "25%" ], ["sWidth"=> "25%"], ["sWidth"=> "25%"]])
       ->setOptions('aoColumnDefs', [['bSortable'=>false, 'aTargets'=>[2]]])
       ->render('datatable') !!}
 
diff --git a/resources/views/invoices/edit.blade.php b/resources/views/invoices/edit.blade.php
index 261dcf2a4785..771a136382ca 100644
--- a/resources/views/invoices/edit.blade.php
+++ b/resources/views/invoices/edit.blade.php
@@ -297,19 +297,19 @@
                         style="text-align: right" class="form-control invoice-item" name="quantity"/>
 				</td>
 				<td style="display:none;" data-bind="visible: $root.invoice_item_taxes.show">
-                    {!! Former::select('')
-                            ->addOption('', '')
-                            ->options($taxRateOptions)
-                            ->data_bind('value: tax1')
-                            ->addClass($account->enable_second_tax_rate ? 'tax-select' : '')
-                            ->raw() !!}
+	                    {!! Former::select('')
+	                            ->addOption('', '')
+	                            ->options($taxRateOptions)
+	                            ->data_bind('value: tax1, event:{change:onTax1Change}')
+	                            ->addClass($account->enable_second_tax_rate ? 'tax-select' : '')
+	                            ->raw() !!}
                     <input type="text" data-bind="value: tax_name1, attr: {name: 'invoice_items[' + $index() + '][tax_name1]'}" style="display:none">
                     <input type="text" data-bind="value: tax_rate1, attr: {name: 'invoice_items[' + $index() + '][tax_rate1]'}" style="display:none">
                     <div data-bind="visible: $root.invoice().account.enable_second_tax_rate == '1'">
                         {!! Former::select('')
                                 ->addOption('', '')
                                 ->options($taxRateOptions)
-                                ->data_bind('value: tax2')
+                                ->data_bind('value: tax2, event:{change:onTax2Change}')
                                 ->addClass('tax-select')
                                 ->raw() !!}
                     </div>
@@ -452,7 +452,7 @@
                             ->addOption('', '')
                             ->options($taxRateOptions)
                             ->addClass($account->enable_second_tax_rate ? 'tax-select' : '')
-                            ->data_bind('value: tax1')
+                            ->data_bind('value: tax1, event:{change:onTax1Change}')
                             ->raw() !!}
                     <input type="text" name="tax_name1" data-bind="value: tax_name1" style="display:none">
                     <input type="text" name="tax_rate1" data-bind="value: tax_rate1" style="display:none">
@@ -461,7 +461,7 @@
                             ->addOption('', '')
                             ->options($taxRateOptions)
                             ->addClass('tax-select')
-                            ->data_bind('value: tax2')
+                            ->data_bind('value: tax2, event:{change:onTax2Change}')
                             ->raw() !!}
                     </div>
                     <input type="text" name="tax_name2" data-bind="value: tax_name2" style="display:none">
diff --git a/resources/views/invoices/knockout.blade.php b/resources/views/invoices/knockout.blade.php
index fb558e71536b..50b48916387f 100644
--- a/resources/views/invoices/knockout.blade.php
+++ b/resources/views/invoices/knockout.blade.php
@@ -179,8 +179,10 @@ function InvoiceModel(data) {
     self.last_sent_date = ko.observable('');
     self.tax_name1 = ko.observable();
     self.tax_rate1 = ko.observable();
+    self.tax_rate1IsInclusive = ko.observable(0);
     self.tax_name2 = ko.observable();
     self.tax_rate2 = ko.observable();
+    self.tax_rate2IsInclusive = ko.observable(0);
     self.is_recurring = ko.observable(0);
     self.is_quote = ko.observable({{ $entityType == ENTITY_QUOTE ? '1' : '0' }});
     self.auto_bill = ko.observable(0);
@@ -268,25 +270,25 @@ function InvoiceModel(data) {
 
     this.tax1 = ko.computed({
         read: function () {
-            return self.tax_rate1() + ' ' + self.tax_name1();
+            return self.tax_rate1IsInclusive() + ' ' + self.tax_rate1() + ' ' + self.tax_name1();
         },
         write: function(value) {
-            var rate = value.substr(0, value.indexOf(' '));
-            var name = value.substr(value.indexOf(' ') + 1);
-            self.tax_name1(name);
-            self.tax_rate1(rate);
+            var parts = value.split(' ');
+            self.tax_rate1IsInclusive(parts.shift());
+            self.tax_rate1(parts.shift());
+            self.tax_name1(parts.join(' '));
         }
     })
 
     this.tax2 = ko.computed({
         read: function () {
-            return self.tax_rate2() + ' ' + self.tax_name2();
+            return self.tax_rate2IsInclusive() + ' ' + self.tax_rate2() + ' ' + self.tax_name2();
         },
         write: function(value) {
-            var rate = value.substr(0, value.indexOf(' '));
-            var name = value.substr(value.indexOf(' ') + 1);
-            self.tax_name2(name);
-            self.tax_rate2(rate);
+            var parts = value.split(' ');
+            self.tax_rate2IsInclusive(parts.shift());
+            self.tax_rate2(parts.shift());
+            self.tax_name2(parts.join(' '));
         }
     })
 
@@ -498,6 +500,37 @@ function InvoiceModel(data) {
     self.showResetFooter = function() {
         return self.default_footer() && self.invoice_footer() != self.default_footer();
     }
+
+    self.applyInclusivTax = function(taxRate) {
+        for (var i=0; i<self.invoice_items().length; i++) {
+            var item = self.invoice_items()[i];
+            item.applyInclusivTax(taxRate);
+        }
+    }
+
+    self.onTax1Change = function(obj, event) {
+        if ( ! event.originalEvent) {
+            return;
+        }
+        var taxKey = $(event.currentTarget).val();
+        var taxRate = parseFloat(self.tax_rate1());
+        if (taxKey.substr(0, 1) != 1) {
+            return;
+        }
+        self.applyInclusivTax(taxRate);
+    }
+
+    self.onTax2Change = function(obj, event) {
+        if ( ! event.originalEvent) {
+            return;
+        }
+        var taxKey = $(event.currentTarget).val();
+        var taxRate = parseFloat(self.tax_rate2());
+        if (taxKey.substr(0, 1) != 1) {
+            return;
+        }
+        self.applyInclusivTax(taxRate);
+    }
 }
 
 function ClientModel(data) {
@@ -666,33 +699,35 @@ function ItemModel(data) {
     self.custom_value2 = ko.observable('');
     self.tax_name1 = ko.observable('');
     self.tax_rate1 = ko.observable(0);
+    self.tax_rate1IsInclusive = ko.observable(0);
     self.tax_name2 = ko.observable('');
     self.tax_rate2 = ko.observable(0);
+    self.tax_rate2IsInclusive = ko.observable(0);
     self.task_public_id = ko.observable('');
     self.expense_public_id = ko.observable('');
     self.actionsVisible = ko.observable(false);
 
     this.tax1 = ko.computed({
         read: function () {
-            return self.tax_rate1() + ' ' + self.tax_name1();
+            return self.tax_rate1IsInclusive() + ' ' + self.tax_rate1() + ' ' + self.tax_name1();
         },
         write: function(value) {
-            var rate = value.substr(0, value.indexOf(' '));
-            var name = value.substr(value.indexOf(' ') + 1);
-            self.tax_name1(name);
-            self.tax_rate1(rate);
+            var parts = value.split(' ');
+            self.tax_rate1IsInclusive(parts.shift());
+            self.tax_rate1(parts.shift());
+            self.tax_name1(parts.join(' '));
         }
     })
 
     this.tax2 = ko.computed({
         read: function () {
-            return self.tax_rate2() + ' ' + self.tax_name2();
+            return self.tax_rate2IsInclusive() + ' ' + self.tax_rate2() + ' ' + self.tax_name2();
         },
         write: function(value) {
-            var rate = value.substr(0, value.indexOf(' '));
-            var name = value.substr(value.indexOf(' ') + 1);
-            self.tax_name2(name);
-            self.tax_rate2(rate);
+            var parts = value.split(' ');
+            self.tax_rate2IsInclusive(parts.shift());
+            self.tax_rate2(parts.shift());
+            self.tax_name2(parts.join(' '));
         }
     })
 
@@ -747,6 +782,34 @@ function ItemModel(data) {
     }
 
     this.onSelect = function() {}
+
+    self.applyInclusivTax = function(taxRate) {
+        if ( ! taxRate) {
+            return;
+        }
+        var cost = self.cost() / (100 + taxRate) * 100;
+        self.cost(roundToTwo(cost));
+    }
+
+    self.onTax1Change = function (obj, event) {
+        if (event.originalEvent) {
+            var taxKey = $(event.currentTarget).val();
+            var taxRate = parseFloat(self.tax_rate1());
+            if (taxKey.substr(0, 1) == 1) {
+                self.applyInclusivTax(taxRate);
+            }
+        }
+    }
+
+    self.onTax2Change = function (obj, event) {
+        if (event.originalEvent) {
+            var taxKey = $(event.currentTarget).val();
+            var taxRate = parseFloat(self.tax_rate2());
+            if (taxKey.substr(0, 1) == 1) {
+                self.applyInclusivTax(taxRate);
+            }
+        }
+    }
 }
 
 function DocumentModel(data) {
@@ -838,9 +901,8 @@ ko.bindingHandlers.productTypeahead = {
                 }
                 @if ($account->invoice_item_taxes)
                     if (datum.default_tax_rate) {
-                        model.tax_rate1(datum.default_tax_rate.rate);
-                        model.tax_name1(datum.default_tax_rate.name);
-                        model.tax1(datum.default_tax_rate.rate + ' ' + datum.default_tax_rate.name);
+                        var $select = $(this).parentsUntil('tbody').find('select').first();
+                        $select.val('0 ' + datum.default_tax_rate.rate + ' ' + datum.default_tax_rate.name).trigger('change');
                     }
                 @endif
             @endif