Setting Up Country-Specific Taxes

Country Setup Examples

This chapter contains sample tax configuration setup data for these tax regimes:

These examples are intended to demonstrate typical setups, option settings, and interdependencies for each tax regime. They are not intended to provide an example of best practices in all cases. The actual details of your own tax configuration setup will depend on your company's specific internal and legal tax requirements.

United Kingdom Value Added Tax (VAT)

In the United Kingdom, Value Added Tax (VAT) is a tax on consumer expenditure that is charged on most business transactions made in the United Kingdom and the Isle of Man. VAT is also charged on goods and some services imported from places outside the European Union, and on goods and some services coming into the United Kingdom from the other European Union countries.

The current rates for VAT are:

Some goods and services are exempt from VAT. In addition, there is a zero rate for United Kingdom companies that supply goods and services to VAT-registered customers in other European Union Member States, provided the company meets the appropriate conditions.

The example in this section is based on the Customs and Excise Management Act 1979.

Setup Features

This tax setup example is for a first party registered in the United Kingdom and dealing with domestic, intra-EU and extra-EU transactions. Setup features include:

Inventory Category Sets and Category Codes

These Inventory category codes are used to identify goods and services for use in tax rules.

See: Setting Up Oracle Inventory for information about creating Inventory item categories for product fiscal classifications.

Inventory Category Sets and Category Codes
Category Set Structure Name Category Code Description
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG01 Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0100 Normal Rated Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0101 Zero Rated Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0102 Exempt Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0103 Reduced Rate Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS01 Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0100 Normal Rated Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0101 Zero Rated Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0102 Exempt Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0103 Reduced Rate Services
GB VAT RECOVERY Fiscal Classification GBR00 Normal Recovery
GB VAT RECOVERY Fiscal Classification GBR01 Zero Recovery
  Intended Use GB Linked to Exempt Sale GB Linked to Exempt Sale

Party Tax Profile: Tax Authority

You first set up the United Kingdom tax authority--HM Revenue and Customs--as a legal authority using the Oracle Legal Entity Manager, and then create a party tax profile for the legal authority.

Legal Authority
Field Value
Organization Name HM Revenue and Customs
Legislative Category Transaction Tax
Country United Kingdom
Address1 VAT Central Unit Alexander House
City Southend-on-Sea
Postal Code SS99 1AA
Status Active
Primary Address Yes
Tax Authority
Field Value
Party Type Tax Authority
Party Name HM Revenue and Customs
Address VAT Central Unit, Alexander House, Southend-on-Sea, Essex, SS99 1AA
Country Name United Kingdom
Set as a Collecting Authority Yes
Set as a Reporting Authority Yes

Tax Zones

The tax zone type European Economic Regions contains a tax zone record for each country in the European Union. The setup values are the same for each country, except for the Geography Name field.

Field Value
Tax Zone Name European Economic Community
Tax Zone Code EU
Start Date 01-Jan-05
Tax Zone Type Economic Regions
Code Type Tax Geography Code
Geography Type Country
Geography Name Austria
  Belgium
  ...
  United Kingdom

Tax Regime Setup

Field Value Field Value
Main Information      
Tax Regime Code GB VAT Country Name United Kingdom
Name GB VAT Effective From 18-Jun-1979
Regime Level Country Used to Group Regimes No
Controls      
Allow Tax Recovery Yes Allow Tax Exemptions No
Allow Override and Entry of Inclusive Tax Lines Yes Allow Tax Exceptions No
Defaults      
Tax Currency GBP Exchange Rate Type User
Minimum Accountable Unit .01 Reporting Tax Authority HM Revenue and Customs
Rounding Rule Nearest Collecting Tax Authority HM Revenue and Customs
Tax Precision 2 Default Recovery Settlement Immediate
Allow Tax Inclusion Standard Non-Inclusive Handling Use Legal Registration Number No
Allow Multiple Jurisdictions No Allow Cross Regime Compounding No
Allow Tax Rounding Override Yes    
Configuration Options (if defined from tax regime)      
Party Name Party name Configuration for Product Exceptions Common Configuration
Configuration for Taxes and Rules Common Configuration Effective From 18-Jun-1979

Tax Setup

Field Value Field Value
Main Information      
Tax Regime Code GB VAT Tax Currency GBP
Configuration Owner Global Configuration Owner Minimum Accountable Unit .01
Tax Source Create a new tax Rounding Rule Nearest
Tax GB VAT Tax Precision 2
Tax Name GB VAT Exchange Rate Type User
Tax Type VAT Reporting Tax Authority HM Revenue and Customs
Effective From 18-Jun-1979 Collecting Tax Authority HM Revenue and Customs
Geography Type Country Applied Amount Handling Recalculated
Parent Geography Type Country Set as Offset Tax No
Parent Geography Name United Kingdom Set Tax for Reporting Purposes Only No
Controls      
Allow Tax Inclusion Standard Non-Inclusive Handling Allow Entry of Manual Tax Lines Yes
Allow Override and Entry of Inclusive Tax Lines Yes Use Legal Registration Number No
Allow Tax Rounding Override Yes Allow Duplicate Tax Registration Numbers No
Allow Override for Calculated Tax Lines Yes Allow Multiple Jurisdictions No
Tax Account Controls      
Tax Accounts Creation Method Create Tax Accounts    
Tax Recovery Controls      
Allow Tax Recovery Yes Primary Recovery Type Standard
Allow Tax Recovery Rate Override Yes Default Primary Recovery Rate Code (Update page) GB VAT STANDARD REC RATE
Allow Primary Recovery Rate Determination Rules Yes Allow Tax Rate Rules No
Allow Secondary Recovery Rate Determination Rules No Default Recovery Settlement Immediate

Tax Status Setup

Field Value Field Value
Main Information      
Tax Regime Code GB VAT Tax GB VAT
Configuration Owner Global Configuration Owner Tax Name GB VAT
Standard Status      
Tax Status Code GB VAT STANDARD Effective From 18-Jun-1979
Name GB VAT Standard Set as Default Tax Status Yes
Reduced Status      
Tax Status Code GB VAT REDUCED Effective From 18-Jun-1979
Name GB VAT Reduced Set as Default Tax Status No
Exempt Status      
Tax Status Code GB VAT EXEMPT Effective From 18-Jun-1979
Name GB VAT Exempt Set as Default Tax Status No
Zero Status      
Tax Status Code GB VAT ZERO Effective From 18-Jun-1979
Name GB VAT Zero Set as Default Tax Status No
Intra EU Zero Status      
Tax Status Code GB VAT INTRA EU ZERO Effective From 1-Jan-2000
Name GB VAT Intra EU Zero Set as Default Tax Status No
Default Controls (all statuses)      
Allow Tax Exemptions No Allow Tax Rate Override Yes
Allow Tax Exceptions No Default Recovery Settlement Immediate

Tax Jurisdiction Setup

This setup is for the one tax jurisdiction--the United Kingdom--for GB VAT.

Field Value
Tax Jurisdiction Code GB VAT
Tax Jurisdiction Name GB VAT
Tax Regime Code GB VAT
Tax GB VAT
Geography Type Country
Parent Geography Type Country
Parent Geography Name United Kingdom
Geography Name United Kingdom
Inner City Jurisdiction N/A
Precedence Level N/A
Collecting Tax Authority HM Revenue and Customs
Reporting Tax Authority HM Revenue and Customs
Effective From 18-Jun-1979
Set as Default Tax Jurisdiction Yes
Default Effective From 18-Jun-1979

Tax Recovery Rate Setup

This example illustrates setup for the VAT recovery rates of standard and zero.

In some instances you may also need to set up a partial rate. A company's actual rate for partial recovery will depend on the combination of its taxable and exempt statuses, as agreed upon with HM Revenue and Customs.

Field Value Field Value
Main Information      
Tax Regime Code GB VAT Tax GB VAT
Tax Regime Name GB VAT Tax Name GB VAT
Configuration Owner Global Configuration Owner Recovery Type Standard
Standard Rate      
Tax Recovery Rate Code GB VAT STANDARD REC RATE Set as Default Rate Yes
Percentage Recovery Rate 100 Default Effective From 18-Jun-1979
Effective From 18-Jun-1979 Allow Ad Hoc Rate N/A
Zero Rate      
Tax Recovery Rate Code GB VAT ZERO REC RATE Set as Default Rate No
Percentage Recovery Rate 0 Allow Ad Hoc Rate N/A
Effective From 18-Jun-1979    

Tax Rate Setup

This example shows the standard VAT rate. There are two rate periods to reflect the rate change After March 1991.

Field Value Field Value
Main Information      
Tax Regime Code GB VAT Tax Status Name GB VAT Standard
Tax Regime Name GB VAT Tax Rate Code GB VAT STANDARD RATE
Tax GB VAT Configuration Owner Global Configuration Owner
Tax Name GB VAT Rate Type Percentage
Tax Status Code GB VAT STANDARD    
Rate Period 1      
Percentage Rate 15 Default Effective From 18-Jun-1979
Effective From 18-Jun-1979 Default Effective To 31-Mar-1991
Effective To 31-Mar-1991 Allow Tax Inclusion Standard Non-Inclusive Handling
Default Recovery Rate Code GB VAT STANDARD REC RATE Allow Override and Entry of Inclusive Tax Lines No
Recovery Type STANDARD Allow Ad Hoc Rate No
Default Recovery Settlement Immediate Adjustment for Ad Hoc Amounts Taxable Basis
Set as Default Rate Yes    
Rate Period 2      
Percentage Rate 17.5 Default Effective From 1-Apr-1991
Effective From 1-Apr-1991 Allow Tax Inclusion Standard Non-Inclusive Handling
Default Recovery Rate Code GB VAT STANDARD REC RATE Allow Override and Entry of Inclusive Tax Lines Yes
Recovery Type STANDARD Allow Ad Hoc Rate No
Default Recovery Settlement Immediate Adjustment for Ad Hoc Amounts Taxable Basis
Set as Default Rate Yes    

Party Tax Profile Setup

Field Value Field Value
First Party Legal Entity      
Party Type First Party Legal Entity Country Name United Kingdom
Party Name Party name    
Main Information      
Set for Self Assessment/Reverse Charge Yes Rounding Rule Nearest
Rounding Level Header Set Invoice Values as Tax Inclusive No
Configuration Options (if defined from party tax profile)      
Tax Regime Code GB VAT Configuration for Product Exceptions N/A
Configuration for Taxes and Rules Common Configuration Effective From 18-Jun-1979
Field Value Field Value
First Party Legal Establishment      
Party Type First Party Legal Establishment Country Name United Kingdom
Party Name Party name    
Tax Registration      
Tax Regime Code GB VAT Tax Registration Reason REVENUE_THRESHOLD
Tax GB VAT Effective From 1-Jan-1991
Tax Registration Number GB123456789 Rounding Rule Nearest
Set as Default Registration Yes Set Invoice Values as Tax Inclusive No
Tax Registration Status REGISTERED Set for Self Assessment/Reverse Charge Yes
Source Explicit    

Product Inventory Fiscal Classifications

This example shows the setup for Inventory-based product fiscal classifications. These fiscal classifications are used in the creation of tax rules for the tax GB VAT.

GB VAT PRODUCT CLASSIFICATION
Fiscal Classification Type Code Start Position Number of Characters Product Classification Source Effective From
GB VAT PRODUCT LEVEL 1 1 5 Inventory 18-Jun-1979
GB VAT PRODUCT LEVEL 2 1 7 Inventory 18-Jun-1979
GB VAT RECOVERY
Fiscal Classification Type Code Start Position Number of Characters Product Classification Source Effective From
GB VAT RECOVERY 1 5 Inventory 18-Jun-1979

Product Intended Use Fiscal Classifications

This example shows the setup for an Inventory-based product intended use fiscal classification type. This fiscal classification type is used in the creation of tax rules for the tax GB VAT.

Fiscal Classification Type Code Effective From Inventory Category Set Fiscal Classification Code Country Name
INTENDED_USE 18-Jun-1979 INTENDED_USE GB Linked to Exempt Sale United Kingdom

Tax Rule Defaults

This example shows the default values that are entered for each rule type for the creation of tax rules for the tax GB VAT. In tax rules, the default value is the most commonly expected result. E-Business Tax uses this value on a transaction when there are no rules that determine another result.

Default Values for GB VAT Tax Rules
Rule Type Default Value
Determine Place of Supply Ship From
Determine Tax Applicability Applicable
Determine Tax Registration Bill From Party
Determine Tax Status GB VAT STANDARD
Determine Tax Rate GB VAT STANDARD RATE
Determine Taxable Basis STANDARD_TB
Calculate Tax Amounts STANDARD_TC

Tax Determining Factor Sets

This example shows tax determining factor sets that are used to create tax rules for the tax GB VAT. There is one determining factor set per rule type. Each determining factor set contains all the determining factors necessary to create tax conditions for the corresponding tax rule.

None of the determining factors in these sets are set as Required.

GB VAT REGISTRATION
Determining Factor Class Class Qualifier Determining Factor Name
User Defined Geography Ship From Economic Regions
Geography Ship From Country
Geography Ship To Country
Transaction Input Factor   Product Type
Registration Bill From Party Registration Status
Transaction Generic Classification   Transaction Business Category
GB VAT Place of Supply
Determining Factor Class Class Qualifier Determining Factor Name
User Defined Geography Ship From Economic Regions
Geography Ship From Country
User Defined Geography Bill From Economic Regions
Geography Ship To Country
Transaction Input Factor   Product Type
Registration Bill From Party Registration Status
Transaction Generic Classification   Transaction Business Category
GB VAT Applicability
Determining Factor Class Class Qualifier Determining Factor Name
Transaction Input Factor   Product Type
Geography Ship From Country
Geography Ship To Country
Geography Bill From Country
Geography Bill To Country
Registration Bill From Party Registration Status
GB VAT Status
Determining Factor Class Class Qualifier Determining Factor Name
Geography Ship From Country
User Defined Geography Ship To Economic Regions
Geography Ship To Country
Transaction Input Factor   Product Type
Product - Inventory Based   GB VAT Product Level 2
Registration Bill From Party Registration Status
Registration Bill To Party Registration Status
Transaction Generic Classification   Transaction Business Category
GB VAT Recovery Rate
Determining Factor Class Class Qualifier Determining Factor Name
Product - Inventory Based   GB VAT Recovery
Transaction Input Factor   Intended Use

Tax Condition Sets

These examples show the tax condition sets that are used to create tax rules. Each tax condition set makes use of one of the tax determining factor sets created for tax rules for the tax GB VAT. The tax condition sets in these examples only show the determining factors that are actually used to create tax conditions; the other determining factors in the tax determining factor set (if any) are considered to be set to Ignore Condition.

GB Intra EU Goods Purchase and Reverse Charge

This example uses two tax condition sets to process a purchase by a UK customer from a supplier in an EU country, and to determine a standard reverse charge on the goods shipped from an EU country to the UK. The UK customer is GB VAT registered, but the supplier is non-GB VAT registered.

The tax condition set GB INTRA EU GOODS PURCHASE uses the tax determining factor set GB VAT PLACE OF SUPPLY in the Determine Place of Supply rule. The tax condition set GB GOODS PURCHASE REVERSE CHARGE uses the tax determining factor set GB VAT REGISTRATION in the Determine Tax Registration rule.

GB INTRA EU GOODS PURCHASE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
User Defined Geography Ship From Economic Regions Equal To European Economic Community
Geography Ship From Country Not Equal To United Kingdom
Geography Ship To Country Equal To United Kingdom
Transaction Generic Classification   Transaction Business Category Equal To Purchase Transaction
Registration Bill From Party Registration Status Equal To Registered in EU (Non GB)
Transaction Input Factor   Product Type Equal To Goods
GB GOODS PURCHASE REVERSE CHARGE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
User Defined Geography Ship From Economic Regions Equal To European Economic Community
Geography Ship From Country Not Equal To United Kingdom
Geography Ship To Country Equal To United Kingdom
Transaction Input Factor   Product Type Equal To GOODS
Transaction Generic Classification   Transaction Business Category Equal To Purchase Transaction
Registration Bill From Party Registration Status Equal To Registered in EU (Non GB)

GB INTRA EU AND DOMESTIC SERVICES

This example uses the tax condition set GB INTRA EU AND DOMESTIC SERVICES to process service transactions where the services are not explicitly defined, and thus the place of supply is deemed to be Where the Supplier Belongs.

The tax condition set GB INTRA EU AND DOMESTIC SERVICES uses the tax determining factor set GB VAT PLACE OF SUPPLY in the Determine Place of Supply rule.

GB INTRA EU AND DOMESTIC SERVICES
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
User Defined Geography Bill From Economic Regions Equal To European Economic Community
Transaction Input Factor   Product Type Equal To Services

GB DOMESTIC GOODS BILL FROM NON REG

This example uses the tax condition set GB DOMESTIC GOODS BILL FROM NON REG to determine that a supplier has to be registered for UK VAT in order to charge UK VAT on goods. If the supplier is not registered, then VAT is not applicable.

The tax condition set GB DOMESTIC GOODS BILL FROM NON REG uses the tax determining factor set GB VAT APPLICABILITY in the Determine Tax Applicability rule.

GB DOMESTIC GOODS BILL FROM NON REG
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Transaction Input Factor   Product Type Equal To GOODS
Geography Ship From Country Equal To United Kingdom
Geography Ship To Country Equal To United Kingdom
Registration Bill From Party Registration Status Not Equal To Registered

GB DOMESTIC SERVICES BILL FROM NON REG

This example uses the tax condition set GB DOMESTIC SERVICES BILL FROM NON REG to determine that a supplier has to be registered for UK VAT in order to charge UK VAT on services. If the supplier is not registered, then VAT is not applicable.

The tax condition set GB DOMESTIC SERVICES BILL FROM NON REG uses the tax determining factor set GB VAT APPLICABILITY in the Determine Tax Applicability rule.

GB DOMESTIC SERVICES BILL FROM NON REG
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Transaction Input Factor   Product Type Equal To SERVICES
Geography Bill From Country Equal To United Kingdom
Geography Bill To Country Equal To United Kingdom
Registration Bill From Party Registration Status Not Equal To Registered

GB INTRA EU GOODS SALE ZERO RATE

This example uses the tax condition set GB INTRA EU GOODS SALE ZERO RATE to determine when a zero rate is applicable for the Determine Tax Status rule.

The tax condition set GB INTRA EU GOODS SALE ZERO RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB INTRA EU GOODS SALE ZERO RATE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Geography Ship From Country Equal To United Kingdom
User Defined Geography Ship To Economic Regions Equal To European Economic Community
Geography Ship To Country Not Equal To United Kingdom
Transaction Input Factor   Product Type Equal To GOODS
Registration Bill From Party Registration Status Equal To Registered
Registration Bill To Party Registration Status Equal To Registered in EU (Non GB)
Transaction Generic Classification   Transaction Business Category Equal To Sales Transaction

GB GOODS REDUCED RATE

This example uses the tax condition set GB GOODS REDUCED RATE to use a reduced rate for sales of reduced rate goods.

The tax condition set GB GOODS REDUCED RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB GOODS REDUCED RATE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Product - Inventory Linked   GB VAT Product Level 2 Equal To Reduced Rate Goods

GB SERVICES REDUCED RATE

This example uses the tax condition set GB SERVICES REDUCED RATE to use a reduced rate for sales of reduced rate goods.

The tax condition set GB SERVICES REDUCED RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB SERVICES REDUCED RATE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Product - Inventory Linked   GB VAT Product Level 2 Equal To Reduced Rate Services

GB GOODS ZERO RATE

This example uses the tax condition set GB GOODS ZERO RATE to use a zero rate for sales of zero-rated goods.

The tax condition set GB GOODS ZERO RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB GOODS ZERO RATE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Product - Inventory Linked   GB VAT Product Level 2 Equal To Zero Rated Goods

GB SERVICES ZERO RATE

This example uses the tax condition set GB SERVICES ZERO RATE to use a zero rate for sales of zero-rated services.

The tax condition set GB SERVICES ZERO RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB SERVICES ZERO RATE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Product - Inventory Linked   GB VAT Product Level 2 Equal To Zero Rated Services

GB EXPORT GOODS OUTSIDE EU

This example uses the tax condition set GB EXPORT GOODS OUTSIDE EU for transactions involving the export of goods to non-EU countries.

The tax condition set GB EXPORT GOODS OUTSIDE EU uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB EXPORT GOODS OUTSIDE EU
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
User Defined Geography Ship To Economic Regions Not Equal To European Economic Community
Geography Ship From Country Equal To United Kingdom
Transaction Input Factor   Product Type Equal To GOODS

GB GOODS EXEMPT RATE

This example uses the tax condition set GB GOODS EXEMPT RATE for the sale of goods with a zero-rated exempt status.

The tax condition set GB GOODS EXEMPT RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB GOODS EXEMPT RATE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Product - Inventory Linked   GB VAT Product Level 2 Equal To Exempt Goods

GB SERVICES EXEMPT RATE

This example uses the tax condition set GB SERVICES EXEMPT RATE for the sale of services with a zero-rated exempt status.

The tax condition set GB SERVICES EXEMPT RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB SERVICES EXEMPT RATE
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Product - Inventory Linked   GB VAT Product Level 2 Equal To Exempt Services

GB PURCHASE LINKED TO EXEMPT SALE ZERO REC

This example uses the tax condition set GB PURCHASE LINKED TO EXEMPT SALE ZERO REC for purchases linked to exempt sales with zero recovery.

The tax condition set GB PURCHASE LINKED TO EXEMPT SALE ZERO REC uses the tax determining factor set GB VAT RECOVERY RATE in the Determine Recovery Rate rule.

GB PURCHASE LINKED TO EXEMPT SALE ZERO REC
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Transaction Input Factor   Intended Use Equal To GB Linked to Exempt Sale

GB PRODUCT ZERO RECOVERY

This example uses the tax condition set GB PRODUCT ZERO RECOVERY for transactions on certain goods and services that have zero recovery.

The tax condition set GB PRODUCT ZERO RECOVERY uses the tax determining factor set GB VAT RECOVERY RATE in the Determine Recovery Rate rule.

GB PRODUCT ZERO RECOVERY
Determining Factor Class Class Qualifier Determining Factor Name Operator Value
Product - Inventory Linked   GB VAT Recovery Equal To Zero Recovery

Tax Rules

These examples show the tax rules created for the tax GB VAT. The tax rules make use of the tax determining factor sets and tax condition sets created for GB VAT. Refer to these sets to understand their usage in each tax rule.

For each tax condition used in a tax rule, the rule result applies when its corresponding tax condition is evaluated as true.

Determine Place of Supply

This tax rule determines the place of supply on Intra-EU transactions for goods and services.

Determine Place of Supply
Tax Rule Code Effective From Condition Set Order Rule Result
GB VAT PLACE OF SUPPLY 1-Jan-2003 GB INTRA EU GOODS PURCHASE 90 Ship to, use bill to if ship to is not found
    GB INTRA EU AND DOMESTIC SERVICES 105 Bill From

Determine Tax Applicability

This tax rule determines whether a supplier is registered for UK VAT in order to charge VAT on goods and services.

Determine Tax Applicability
Tax Rule Code Effective From Condition Set Order Rule Result
GB VAT APPLICABILITY 1-Jan-2003 GB DOMESTIC GOODS BILL FROM NON REG 50 Not Applicable
    GB DOMESTIC SERVICES BILL FROM NON REG 60 Not Applicable

Determine Tax Registration

This tax rule determines the tax registration when a UK VAT registered customer purchases goods from a non-UK VAT registered supplier, where the goods are sent from an EU country outside the UK to the UK.

Determine Tax Registration
Tax Rule Code Effective From Condition Set Order Rule Result
GB VAT REGISTRATION 1-Jan-2003 GB GOODS PURCHASE REVERSE CHARGE 50 Bill To Party

Determine Tax Status

This tax rule determines the tax status of the transaction. Each rule result indicates the tax status to use on the transaction if the corresponding condition is evaluated as true.

Determine Tax Status
Tax Rule Code Effective From Condition Set Order Rule Result
GB VAT STATUS 1-Jan-2003 GB INTRA EU GOODS SALE ZERO RATE 50 GB VAT INTRA EU ZERO
    GB EXPORT GOODS OUTSIDE EU 60 GB VAT ZERO
    GB GOODS ZERO RATE 70 GB VAT ZERO
    GB SERVICES ZERO RATE 80 GB VAT ZERO
    GB GOODS EXEMPT RATE 90 GB VAT EXEMPT
    GB SERVICES EXEMPT RATE 100 GB VAT EXEMPT
    GB GOODS REDUCED RATE 110 GB VAT REDUCED
    GB SERVICES REDUCED RATE 120 GB VAT REDUCED

Determine Recovery Rate

This tax rule derives a zero recovery rate for purchases linked to exempt sales with zero recovery.

Determine Recovery Rate
Tax Rule Code Effective From Condition Set Order Rule Result
GB VAT RECOVERY RATE 1-Jan-2003 GB PURCHASE LINKED TO EXEMPT SALE ZERO REC 5 GB VAT ZERO REC RATE

Canadian Sales Tax

In Canada, sales taxes exist at the federal level and at the provincial level. Goods and Services Tax (GST) is a federal tax levied in provinces and territories across Canada on many consumer products and professional services. Provincial Sales Tax (PST) varies by province. The tax rates within each province apply to the value of goods or services before GST is applied. The only exceptions are Quebec and Prince Edward Island, where the sales tax applies to the value of goods or services after GST is applied.

A federal and provincial blended tax called Harmonized Sales Tax (HST) is levied in the three participating provinces of Newfoundland and Labrador, Nova Scotia, and New Brunswick. The HST operates as a single rate of 14%, of which six percent (6%) represents the federal component and eight percent (8%) the provincial component.

The recovery of tax is made through a rebate and/or an Input Tax Credit (ITC), depending on whether the purchases are intended for commercial or non-profit activities. Some goods and services are exempt from GST and HST, such as health and educational services.

Taxable goods and services are subject to one of the following statuses:

Tax status is generally determined by product. For the consumer, there is no difference between zero-rated and exempt goods and services: the consumer either pays tax or not. Although GST and HST are not charged on zero-rated goods and services, the tax registrant can claim input tax credits to recover the GST or HST paid or owed on purchases and the expenses incurred to provide them.

The example in this section is based on the changes to GST and HST rates effective July 1, 2006.

Examples

This section provides four examples of Canadian tax setup:

Prerequisites

Before you can set up the E-Business Tax tax configuration for these examples, you may need to complete one or more of these tasks:

Tax Regime Setup

There are two tax regimes required for the above examples:

The CA GST HST regime has a compounding precedence of 1; the CA PST regime has a compounding precedence of 2.

Field Value Field Value
Main Information      
Tax Regime Code CA GST HST Country Name Canada
Name CA GST HST Effective From 1-Jan-2001
Regime Level Country    
Controls      
Allow Tax Recovery Yes Allow Tax Exemptions Yes
Allow Override and Entry of Inclusive Tax Lines Yes Allow Tax Exceptions No
Defaults      
Tax Currency CAD Exchange Rate Type User
Minimum Accountable Unit .01 Reporting Tax Authority Canada Revenue Agency
Rounding Rule Nearest Collecting Tax Authority Canada Revenue Agency
Tax Precision 2 Default Recovery Settlement Immediate
Allow Tax Inclusion Standard Non-Inclusive Handling Use Legal Registration Number No
Allow Multiple Jurisdictions Yes Allow Cross Regime Compounding Yes
Allow Tax Rounding Override Yes Compounding Precedence 1
Configuration Options (if defined from tax regime)      
Party Name Party name Configuration for Product Exceptions Common Configuration
Configuration for Taxes and Rules Common Configuration Effective From 1-Jan-2001
Field Value Field Value
Main Information      
Tax Regime Code CA PST Country Name Canada
Name CA PST Effective From 1-Jan-2001
Regime Level Country    
Controls      
Allow Tax Recovery Yes Allow Tax Exemptions Yes
Allow Override and Entry of Inclusive Tax Lines Yes Allow Tax Exceptions No
Defaults      
Tax Currency CAD Exchange Rate Type User
Minimum Accountable Unit .01 Reporting Tax Authority Canada Revenue Agency
Rounding Rule Nearest Collecting Tax Authority Canada Revenue Agency
Tax Precision 2 Default Recovery Settlement Immediate
Allow Tax Inclusion Standard Non-Inclusive Handling Use Legal Registration Number No
Allow Multiple Jurisdictions Yes Allow Cross Regime Compounding Yes
Allow Tax Rounding Override Yes Compounding Precedence 2

Party Tax Profile Setup

The tables below describe the first party legal establishment setup and tax registration setups for Canada, Ontario, and Quebec. For Ontario Example 1, the registration status of the legal establishment is a factor in determining whether the GST and/or PST are applicable. For this example, the registration for this legal establishment will include GST across Canada, PST registration in Ontario, and PST registration in Quebec.

You also need to create party tax profiles for each of the three taxing authorities: Canada Revenue Agency for the GST across Canada, Ontario Ministry of Finance for the Ontario PST, and Ministere du Revenu du Quebec for the Quebec PST. You need to set up each of these tax authorities in the Legal Entity Manager as a legal authority for transaction tax. The tax authorities are all both collecting and reporting tax authorities.

Field Value Field Value
First Party Legal Establishment      
Party Type First Party Legal Establishment Country Name Canada
Party Name Party name    
Tax Registrations      
Canada Registration      
Tax Regime Code CA GST HST Source Explicit
Tax Registration Number 10810 2831 RT0001 Effective From 1-Jan-2001
Set as Default Registration Yes Rounding Rule Nearest
Tax Registration Status REGISTERED Set Invoice Values as Tax Inclusive No
Issuing Tax Authority Canada Revenue Agency Set for Self Assessment/Reverse Charge Yes
Ontario Registration      
Tax Regime Code CA PST Source Explicit
Tax Registration Number 9800 1120 Effective From 1-Jan-2001
Set as Default Registration No Rounding Rule Nearest
Tax Registration Status REGISTERED Set Invoice Values as Tax Inclusive No
Issuing Tax Authority Ontario Ministry of Finance Set for Self Assessment/Reverse Charge Yes
Quebec Registration      
Tax Regime Code CA PST Source Explicit
Tax Registration Number 1515151515 TQ 0001 Effective From 1-Jan-2001
Set as Default Registration NO Rounding Rule Nearest
Tax Registration Status REGISTERED Set Invoice Values as Tax Inclusive No
Issuing Tax Authority Ministere du Revenu du Quebec Set for Self Assessment/Reverse Charge Yes

Tax Setup

Field Value Field Value
Main Information      
Tax Regime Code CA GST HST Tax Currency CAD
Configuration Owner Global Configuration Owner Minimum Accountable Unit .01
Tax Source Create a new tax Rounding Rule Nearest
Tax CA GST Tax Precision 2
Tax Name CA GST Exchange Rate Type User
Tax Type VAT Reporting Tax Authority Canada Revenue Agency
Effective From 1-Jan-2001 Collecting Tax Authority Canada Revenue Agency
Geography Type Province Applied Amount Handling Recalculated
Parent Geography Type Country Set as Offset Tax No
Parent Geography Name Canada Set Tax for Reporting Purposes Only No
Compounding Precedence 1    
Controls      
Allow Tax Inclusion Standard Non-Inclusive Handling Use Legal Registration Number No
Allow Override and Entry of Inclusive Tax Lines Yes Allow Duplicate Tax Registration Numbers No
Allow Tax Rounding Override Yes Allow Multiple Jurisdictions Yes
Allow Override for Calculated Tax Lines Yes Allow Mass Creation of Jurisdictions Yes
Allow Entry of Manual Tax Lines Yes    
Tax Account Controls      
Tax Accounts Creation Method Create Tax Accounts    
Tax Recovery Controls      
Allow Tax Recovery Yes Primary Recovery Type Standard
Allow Tax Recovery Rate Override Yes Default Primary Recovery Rate Code (Update page) FEDERAL REC RATE
Allow Primary Recovery Rate Determination Rules Yes Secondary Recovery Type Reduced
Allow Secondary Recovery Rate Determination Rules Yes Default Secondary Recovery Rate Code (Update page) PROVINCIAL REC RATE
Allow Tax Rate Rules No Default Recovery Settlement Immediate

Tax Status Setup

Create two standard statuses, one for GST (CA GST STANDARD) and one for PST (CA PST STANDARD). The two statuses have the same settings.

Field Value Field Value
Main Information      
Tax Regime Code CA GST HST Tax CA GST
Configuration Owner Global Configuration Owner Tax Name CA GST
Standard Status      
Tax Status Code CA GST STANDARD Effective From 1-Jan-2001
Name CA GST Standard Set as Default Tax Status Yes
Default Controls      
Allow Tax Exemptions No Allow Tax Rate Override Yes
Allow Tax Exceptions No    

Tax Jurisdiction Setup

Tax jurisdiction setup in Canada requires a separate record for each province. In addition, provinces that apply GST and PST separately require two tax jurisdiction records. Different PST tax rates can apply at the jurisdiction level. Because both GST and PST apply to all transactions, neither jurisdiction takes precedence or is set as a default jurisdiction.

This example shows the GST and PST tax jurisdictions for Ontario.

Ontario Tax Jurisdiction for GST

Field Value
Tax Jurisdiction Code CA ON
Tax Jurisdiction Name CA Ontario
Tax Regime Code CA GST HST
Tax CA GST
Geography Type Province
Parent Geography Type Country
Parent Geography Name Canada
Geography Name ON
Inner City Jurisdiction N/A
Precedence Level N/A
Collecting Tax Authority Canada Revenue Agency
Reporting Tax Authority Canada Revenue Agency
Effective From 1-Jan-2001
Set as Default Tax Jurisdiction N/A

Ontario Tax Jurisdiction for PST

Field Value
Tax Jurisdiction Code CA ON
Tax Jurisdiction Name CA Ontario
Tax Regime Code CA PST
Tax CA PST
Geography Type Province
Parent Geography Type Country
Parent Geography Name Canada
Geography Name ON
Inner City Jurisdiction N/A
Precedence Level N/A
Collecting Tax Authority Ontario Ministry of Finance
Reporting Tax Authority Ontario Ministry of Finance
Effective From 1-Jan-2001
Set as Default Tax Jurisdiction N/A

Tax Recovery Rate Setup

The Quebec PST recovery example uses a standard 100% recovery rate. Actual reduced rates at the provincial level are agreed upon with the provincial tax authority.

Field Value Field Value
Main Information      
Tax Regime Code CA PST Tax CA PST
Tax Regime Name CA PST Tax Name CA PST
Configuration Owner Global Configuration Owner Recovery Type Standard
Standard Rate      
Tax Recovery Rate Code CA PST STANDARD REC RATE Set as Default Rate Yes
Percentage Recovery Rate 100 Default Effective From 1-Jan-2001
Effective From 1-Jan-2001 Allow Ad Hoc Rate N/A

Tax Rate Setup

This example uses the standard GST rate of 7%. The standard PST for most provinces in Canada is 7%; however, the rate is 7.5% in Quebec and 8% in Ontario. As such, the PST tax rates for Quebec and Ontario will also specify the tax jurisdiction. Additional rates may also apply at the provincial level.

Field Value Field Value
Main Information      
Tax Regime Code CA GST HST Tax Status Name CA GST Standard
Tax Regime Name CA GST HST Tax Rate Code CA GST STD RATE
Tax CA GST Configuration Owner Global Configuration Owner
Tax Name CA GST Rate Type Percentage
Tax Status Code CA GST STD    
Rate Period      
Percentage Rate 6 Default Effective From 1-Jul-2006
Effective From 1-Jul-2006 Allow Tax Inclusion Standard Non-Inclusive Handling
Default Recovery Rate Code CA GST STD REC RATE Allow Override and Entry of Inclusive Tax Lines Yes
Recovery Type STANDARD Allow Ad Hoc Rate No
Default Recovery Settlement Immediate Adjustment for Ad Hoc Amounts Taxable Basis
Set as Default Rate Yes    

Fiscal Classification Setup

You must set up these fiscal classifications for the corresponding examples:

Tax Formulas Setup

For Ontario Example 2, create a tax formula to represent the reduced taxable basis.

Field Value
Tax Formula Code CA TB PST ON MOBILE HOME
Name CA Taxable Basis PST ON Mobile Homes
Formula Type Taxable Basis
Taxable Basis Type Line Amount
Regime Code CA PST
Tax CA PST
Effective From 1-Jan-2001
Base Rate Modifier -50

For Quebec Example 1, create a tax formula to represent that PST is calculated upon the sale price plus GST.

Field Value
Tax Formula Code CA TB GST INCLUDED
Name CA Taxable Basis GST Included
Formula Type Taxable Basis
Taxable Basis Type Line Amount
Regime Code CA PST
Tax CA PST
Effective From 1-Jan-2001
Compounding Regime Code CA GST and HST
Compounding Tax CA GST
Compounding Rule Add
Enforce Compounding Yes

Tax Zone Setup

Create a tax zone to group together provinces that share the same compounding rule for PST. In this case, both Quebec and Prince Edward Island calculate PST on the selling price plus GST.

Field Value
Tax Zone Type CA GST Incl
Country Canada
Province Zone Creation Allowed Yes
Tax Zone Name CA QC and PE
Tax Zone Code CA QC AND PE
Start Date 1-Jan-2005
Code Type Tax Geography Code
Geography Type Province
Geography Names PE, QC

Tax Rule Defaults

Tax rule defaults simplify the tax rule setup and reduce the number of rules by identifying the most common value for each rule type. For example, if GST is applicable on most transactions, then the default value for the rule type Determine Tax Applicability for the tax CA GST is Applicable.

Rule Type Tax Default
Determine Place of Supply CA GST, CA PST Ship To
Determine Tax Applicability CA GST, CA PST Applicable
Determine Tax Registration CA GST, CA PST Ship From Party
Determine Tax Status CA GST CA GST STD
Determine Tax Status CA PST CA PST STD
Determine Tax Rate CA GST CA GST STD RATE
Determine Tax Rate CA PST CA PST STD RATE
Determine Taxable Basis CA GST, CA PST STANDARD_TB
Calculate Tax Amounts CA GST, CA PST STANDARD_TC

Tax Rules Setup - Ontario Example 1

Since you will typically set the tax applicability of a tax as Applicable, you will need to define a Determine Tax Applicability tax rule to identify when a transaction is not applicable for GST and PST. In this particular example, the tax is not applicable when the Ship From Party is Not Registered for the tax, and the transaction is a sales transaction.

Tax Determining Factor Set

This table describes the tax determining factor set to use with this tax rule. This tax determining factor set identifies the registration status of the ship from party and the type of transaction.

Determining Factor Class Class Qualifier Determining Factor Name Required
Registration Ship From Party Registration Status Yes
Transaction Generic Classification   Transaction Business Category Yes

Tax Condition Set

This table describes the tax condition set to use with this tax rule. This tax condition set indicates that the Ship From Party is Not Registered for this tax, and that this rule will apply to Sales Transactions.

Determining Factor Class Class Qualifier Determining Factor Name Operator Value Ignore Condition
Registration Ship From Party Registration Status Equal To Not Registered No
Transaction Generic Classification   Transaction Business Category Equal To Sales Transaction No

If the values of this tax condition set are evaluated as true, then the result of the Determine Tax Applicability rule is Not Applicable.

Tax Rules Setup - Ontario Example 2

Because the taxable basis formula for most transactions is (line amount) * (tax rate), you will need to define a Determine Taxable Basis tax rule to identify when a different taxable basis is needed and which taxable basis tax formula to use. In this example, the taxable basis in Ontario is reduced for the purchase of mobile homes that are used for construction purposes.

Tax Determining Factor Set

This table describes the tax determining factor set to use with this tax rule. This tax determining factor set identifies the shipping destination, the product, and the intended use of the product.

Determining Factor Class Class Qualifier Determining Factor Name Required
Geography Ship To Province No
Product - Non-Inventory Based Level 3 Product Category No
User Defined Geography Ship To CA GST Incl No
Transaction Input Factor   Intended Use No

Tax Condition Set

This table describes the tax condition set to use with this tax rule. This tax condition set indicates that the shipping destination is Ontario, the product is a portable home, and that the portable home it will be used for construction purposes.

Determining Factor Class Class Qualifier Determining Factor Name Operator Value Ignore Condition
Geography Ship To Province Equal To ON (Ontario) No
Product - Non-Inventory Based Level 3 Product Category Equal To

  • CA General Goods and Services

  • CA General Goods

  • CA Portable Homes

 No
Transaction Input Factor   Intended Use Equal To CA Construction No

If the values of this tax condition set are evaluated as true, then the result of the Determine Taxable Basis rule is the tax formula CA TB PST ON MOBILE HOME. This formula is used to determine the taxable basis, which results in a 50% reduction in the taxable basis.

Tax Rules Setup - Quebec Example 1

As mentioned above, the taxable basis formula for most transactions is (line amount) * (tax rate). Since the PST in Quebec is calculated on the selling price plus GST, you will need to define a Determine Taxable Basis tax rule to identify when a different taxable basis is needed and which taxable basis tax formula to use.

Tax Determining Factor Set

This table describes the tax determining factor set to use with this tax rule. This tax determining factor set identifies the shipping destination, the product, and the intended use of the product.

Determining Factor Class Class Qualifier Determining Factor Name Required
Geography Ship To Province No
Product - Non-Inventory Based Level 3 Product Category No
User Defined Geography Ship To CA GST Incl No
Transaction Input Factor   Intended Use No

Tax Condition Set

This table describes the tax condition set to use with this tax rule. This tax condition set indicates that the shipping destination is either of 2 provinces that apply PST on the sale price plus GST.

Determining Factor Class Class Qualifier Determining Factor name Operator Value Ignore Condition
User Defined Geography Ship To CA GST Incl Equal To CA QC and PE No

If the values of this tax condition set are evaluated as true, then the result of the Determine Taxable Basis rule is the tax formula CA TB GST INCLUDED. This formula is used to determine the taxable basis, which results in PST calculated on the sale price plus GST Note that this tax rule uses the same tax determining factor set as in Ontario Example 2 for tax rule efficiency.

Tax Rules Setup - Quebec Example 2

This tax rule setup identifies when tax recovery is applicable and which tax recovery rate applies. The example refers to setting up a Determine Recovery Rate tax rule for resale transactions in Quebec.

Tax Determining Factor Set

This table describes the tax determining factor set to use with this tax rule. This tax determining factor set identifies the shipping destination and the intended use of the product.

Determining Factor Class Class Qualifier Determining Factor Name Required
Geography Ship From Country No
Geography Ship To Country No
Geography Ship To Province No
Party Fiscal Classification Bill From Party CA Organization Types No
Party Fiscal Classification Ship To Party CA Organization Types No
Product - Non-Inventory Based Level 1 Product Category No
Product - Non-Inventory Based Level 2 Product Category No
Product - Non-Inventory Based Level 3 Product Category No
User Defined Geography Ship To CA HST Provincial Rebate No
Transaction Input Factor   Intended Use No

Tax Condition Set

This table describes the tax condition set to use with this tax rule. This tax condition set indicates that the shipping destination is either of 2 provinces that apply PST on the sale price plus GST and that the product is intended for resale.

Determining Factor Class Class Qualifier Determining Factor name Operator Value Ignore Condition
Geography Ship To Province Equal To QC No
Transaction Input Factor   Intended Use Equal To CA Resale No

If the values of this tax condition set are evaluated as true, then the result of the Determine Recovery Rate rule is the tax recovery rate CA PST STD REC RATE.

United States Sales and Use Tax

United States Sales and Use Tax is a tax levied on the end consumer, with the business serving as the collection agent for the tax authority. Any company receiving goods within a state must either pay sales tax on receipt or self-accrue a use tax, usually to the same value. The self-accrual scheme ensures that the state receives income independent of the tax registration of the business.

The details of rates and regulations surrounding sales and use tax vary from state to state, and are a matter of state and local law and court cases. Exemptions are normally available in each state, including, but not limited to: resales, manufacturing, research and development, non-profit or exempt organizations, and governmental organizations.

The nexus of taxation refers to the minimum level of commerce necessary to allow a tax authority to impose a tax registration, tax filing, and/or tax collection responsibility. The type of activity required to create nexus is defined by state or local statute, case law, and the due process and Commerce Clause of the United States Constitution. Whether a business has established nexus in a tax jurisdiction requires an assessment of all facts and circumstances of its activity within that jurisdiction. You should seek the advice of a qualified tax professional to determine if your business has established nexus (a registration and filing requirement) before you implement sales tax.

The situs of taxation describes which tax authority levies the tax. This is typically the ship-to state, county, or city, although there are many local taxes that base situs on the ship-from location. Any tax collected for a given tax authority must be reported back to that same authority.

Setup Features

This tax setup example is for a first party registered in California and dealing with city, county, state transactions. Setup features include:

Tax Regime Setup

Field Value Field Value
Main Information      
Tax Regime Code US SALES AND USE Country Name United States
Name US Sales and Use Effective From 1-Jan-2000
Regime Level Country    
Controls      
Allow Tax Recovery No Allow Tax Exemptions Yes
Allow Override and Entry of Inclusive Tax Lines No Allow Tax Exceptions Yes
Defaults      
Tax Currency USD Allow Multiple Jurisdictions Yes
Minimum Accountable Unit .01 Allow Tax Rounding Override Yes
Rounding Rule Nearest Exchange Rate Type Corporate
Tax Precision 2 Use Legal Registration Number No
Allow Tax Inclusion Standard Non-Inclusive Handling Allow Cross Regime Compounding No
Configuration Options (if defined from tax regime)      
Party Name Party name Configuration for Product Exceptions Common Configuration
Configuration for Taxes and Rules Common Configuration Effective From 1-Jan-2000

Party Tax Profile Setup

Field Value Field Value
First Party Legal Entity      
Party Type First Party Legal Entity Country Name United States
Party Name Party name    
Main Information      
Set for Self Assessment/Reverse Charge No Rounding Rule Nearest
Rounding Level Header Set Invoice Values as Tax Inclusive No
Configuration Options (if defined from party tax profile)      
Tax Regime Code US SALES AND USE Configuration for Product Exceptions Common Configuration
Configuration for Taxes and Rules Common Configuration Effective From 1-Jan-2000
Field Value Field Value
First Party Legal Establishment      
Party Type First Party Legal Establishment Country Name United States
Party Name Party name    
Tax Registration      
Tax Regime Code US SALES AND USE Tax Jurisdiction Code US CA STATE SALES
Tax US STATE SALES Effective From 1-Jan-2001
Tax Registration Number 567890 Rounding Rule Nearest
Set as Default Registration Yes Set Invoice Values as Tax Inclusive No
Tax Registration Status REGISTERED Set for Self Assessment/Reverse Charge Yes
Source Explicit    

Tax Setup

There are three taxes under the US SALES AND USE tax regime for city, county, and state sales. The example below is for state sales. All setup values are the same for the three taxes.

Field Value Field Value
Main Information      
Tax Regime Code US SALES AND USE Tax Currency USD
Configuration Owner Global Configuration Owner Minimum Accountable Unit .01
Tax Source Create a new tax Rounding Rule Nearest
Tax US STATE SALES Tax Precision 2
Tax Name US State Sales Exchange Rate Type Corporate
Tax Type Sales Reporting Tax Authority US STATE Tax Authority
Effective From 1-Jan-2000 Collecting Tax Authority US STATE Tax Authority
Geography Type State Applied Amount Handling Prorated
Parent Geography Type Country Set as Offset Tax No
Parent Geography Name United States Set Tax for Reporting Purposes Only No
Controls      
Allow Tax Inclusion Standard Non-Inclusive Handling Use Legal Registration Number No
Allow Override and Entry of Inclusive Tax Lines No Allow Duplicate Tax Registration Numbers Yes
Allow Tax Rounding Override Yes Allow Multiple Jurisdictions Yes
Allow Override for Calculated Tax Lines Yes Allow Mass Creation of Jurisdictions Yes
Allow Entry of Manual Tax Lines Yes    
Tax Account Controls      
Tax Accounts Creation Method Create Tax Accounts    
Tax Recovery Controls      
Allow Tax Recovery No Allow Secondary Recovery Rate Determination Rules No
Allow Tax Recovery Rate Override No Allow Tax Rate Rules Yes
Allow Primary Recovery Rate Determination Rules No    

Tax Status Setup

Field Value Field Value
Main Information      
Tax Regime Code US SALES AND USE Tax US STATE SALES
Configuration Owner Global Configuration Owner Tax Name US State Sales
Standard Status      
Tax Status Code US STATE SALES STANDARD Effective From 1-Jan-2000
Name US State Sales Standard Set as Default Tax Status Yes
Reduced Status      
Tax Status Code US STATE SALES REDUCED Effective From 1-Jan-2000
Name US State Sales Reduced Set as Default Tax Status No
Zero Status      
Tax Status Code US STATE SALES ZERO Effective From 1-Jan-2000
Name US State Sales Zero Set as Default Tax Status No
Default Controls (all statuses)      
Allow Tax Exemptions Yes Allow Tax Rate Override Yes
Allow Tax Exceptions Yes    

Tax Jurisdiction Setup

This setup is for the California state tax jurisdiction.

Field Value
Tax Jurisdiction Code US CA STATE SALES
Tax Jurisdiction Name US California State Sales
Tax Regime Code US SALES AND USE
Tax US STATE SALES
Geography Type State
Parent Geography Type Country
Parent Geography Name United States
Geography Name California
Precedence Level 1
Effective From 1-Jan-2000
Set as Default Tax Jurisdiction Yes
Default Effective From 1-Jan-2000

Tax Rate Setup

This example shows the standard state tax rate. The setup for reduced and zero is the same, except for the special reduced percentage rate and a zero percentage rate.

Field Value Field Value
Main Information      
Tax Regime Code US SALES AND USE Tax Status Name US State Sales Standard
Tax Regime Name US Sales and Use Tax Rate Code US STATE SALES STD RATE
Tax US STATE SALES Configuration Owner Global Configuration Owner
Tax Name US State Sales Rate Type Percentage
Tax Status Code US STATE SALES STANDARD    
Rate Period      
Percentage Rate 6.25 Default Effective From 1-Jan-2000
Effective From 1-Jan-2000 Set as Default Rate Yes
Allow Tax Exemptions Yes Allow Ad Hoc Rate Yes
Allow Tax Exceptions Yes Adjustment for Ad Hoc Amounts Tax Rate