Entering Taxes on Expense Reports
Payables and Web Expense use the following Payables tax features during expense report entry:
- Tax Name Defaults hierarchy
- Automatic Tax Calculation (inclusive Line level only)
This section describes how you use these features to record taxes on expense reports.
Tax Name Defaulting
Tax Name Defaulting for Expense Report Templates
When you create a template for an expense report, after you enter an account for an item, Payables defaults a value for the Tax Name field based on your Tax Name Defaults hierarchy. Note that for expense report templates, the only sources Payables uses are Financials Options and Account. You define your Tax Name Default hierarchy in the Tax Name Defaults region of the Payables Options window. See: Tax Control Methods.
Tax Name Defaulting During Expense Report Entry
When you enter expense report items, in either the Expense Reports window in Payables or the Enter Receipts page in Web Employees, the value for the Tax Name field defaults based on your Tax Name Defaults hierarchy. Note that for expense reports, the only sources Payables uses are Financials Options, Account, and Template. Payables defaults the tax name from the expense report template only if Template is the source the hierarchy uses. If Template is the source Payables uses, it provides the value from the expense report template even if the value is null.
Includes Tax Check Box
If you use Automatic Tax Calculation, Payables can perform tax inclusive line tax calculation for expense items that you enter in the Payables Expense Reports window or Web Employees users enter in the Enter Receipts page. If you use Line Level Automatic Tax Calculation, you can use the Includes Tax check box to create appropriate Item and Tax invoice distributions during Payables Invoice Import.
Note: For expense reports entered in the Payables Expense Reports window or the Enter Receipts page of Web Employees, For expense reports, Payables does not perform Header level automatic tax calculation, and it does not perform tax exclusive Line level automatic tax calculation. The only automatic tax calculation Payables performs for these expense reports is tax inclusive Line level automatic tax calculation.
Enabling the Includes Tax check box for an expense item indicates that an expense amount includes tax. If a user enables this check box for an expense item, then during Payables Invoice Import, when Payables creates a corresponding expense invoice distribution, the system decreases the distribution amount by the calculated sales tax. Payables will also create a Tax type distribution for the appropriate sales tax amount.
If a supplier site exists for an employee, then Payables and Web Employees use the automatic tax calculation options at the supplier site to determine how automatic tax calculation is used for the employee's expense reports. If a supplier site does not exist for the employee, Payables and Web Employees use the the automatic tax calculation options in the Payables Options window to determine how automatic tax calculation is used for the employee's expense reports.
For more information, see: Automatic Tax Calculation Overview. In addition, to use the Includes Tax check box in Web Expense, you must set the WebExpenses:Enable Tax profile option to Yes.
If you do not use Line level automatic tax calculation or you do not enable override of the check box, you cannot enable the check box in the Expense Reports window in Payables, and the check box will not appear in the Enter Receipts window.
Tax in Web Expense
The tax name in the Enter Receipts page defaults based on your Tax Name Defaults hierarchy. If you want to allow employees to adjust the default Tax Name, then you can create a poplist of alternate Tax Name values. See also: Tax Names.
To set up the tax name poplist in the Enter Receipts page:
Enter Yes for the WebExpenses:Enable Tax profile option.
In the Tax Names window for the Tax Names you want to appear on the poplist, enable the Enable for Self-Service Users option.
If you use natural account tax defaulting and want to allow override of tax names that are assigned to accounts, then in the GL Tax Assignments window, choose the Allow Override check box.
INVOICE TAX RESTRICTIONS:
REQUIRE TAX ENTRY AT HEADER OPTION: If this option is enabled, you cannot enter Use tax names for some invoices, either manually or through a supplier site default. In addition, you should not enable this option if you want to use the Prorate Tax feature because if you enter a default tax and amount and then prorate, you may overstate your taxes.
See Also
Automatic Withholding Tax Overview
Setting Up Supplier Tax Information
Tax Names
QuickCodes
Tax Audit Trail Report (By Tax Code or Invoice)
Use Tax Liability Report
Tax Names Listing
Intra-EU VAT Audit Trail Report
Tax Declaration Report
