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13.3.10. Tax Codes

Tax Codes define the amount and type(s) of Tax to be added to an Order. To access the master list of Tax Codes, select the "Tax Codes" option. The following screen will appear:

Tax Codes Master List

The Tax Codes master list displays the code and description for all existing Tax Codes.

13.3.10.1. Tax Code

To create a new Tax Code, select the NEW button. The following screen will appear:

Create New Tax Code

When creating a new Tax Code, you are presented with the following options:

Code

Enter an identifying code for the Tax Code.

Description

Enter a description to identify the Tax Code.

Account

Specify a valid General Ledger Account. This is a Liability Account. It will be credited when Invoices are posted and debited when Credit Memos are posted.

Note

When cash based tax distribution is used, a Clearing Account as well as a Distribution Account can be specified. Tax related transactions are posted to the Clearing Account when cash related transactions are posted.

Tax Class

Select a valid Tax Class.

Calculation basis on

Select a valid calculation basis. This list includes "Base Price" and all other Tax Codes that share the same Tax Class. When "Base Price" is selected the Tax Code may be assigned on the Tax Assignment window, and the tax calculation will be based on the base price amount to be taxed, plus any applicable cumulative taxes. When a Tax Code is selected, then the Tax Code will be calculated against the derived amount from the referenced Tax Code. This is a method used for defining nested taxes or "a tax on a tax".

Tax Authority

Select a valid Tax Authority. This selection is required if you want to generate Tax Returns for a specified Tax Authority. The link between Tax Codes and Tax Authorities is the key driver behind the Tax Return report.

Note

For transaction information to be included in the Tax Return report, the Tax Authority must be linked to one or more Tax Codes.

Auto Apply to Memos

Select if you want the Tax Code rate to be automatically applied to miscellaneous Credit/Debit Memos. This feature is designed primarily to support Value Added Tax (VAT) scenarios. If this option is not selected, Tax will not be calculated automatically for Memos.

A/P Memos

Select to have the Tax Code rate automatically applied to miscellaneous Payables Credit/Debit Memos.

A/R Memos

Select to have the Tax Code rate automatically applied to miscellaneous Receivables Credit/Debit Memos.

When defining or maintaining Tax Code Rates, you are presented with the following options:

Rates

Display includes Rates for the specified Tax Code.

The following buttons are unique to this screen:

EXPIRE

Highlight a Tax Code Rate and then select this button to expire the Rate. The Effectivity End Date will be changed to the current date.

To create a new Tax Code Rate, select the NEW button. The following screen will appear:

Create New Tax Code Rate

When creating a new Tax Code Rate, you are presented with the following options:

Effectivity Start Date

Enter the date that this Tax Code Rate becomes effective.

Effectivity End Date

Enter the date that this Tax Code Rate is no longer effective.

Percentage

Enter the tax rate as a percentage.

Amount

Enter the additional flat rate amount.