Tax Codes and Rates
Use the Tax Codes and Rates window to enter and maintain your tax codes and their associated tax rates. You can define as many tax codes of type VAT (Value Added Tax) or Sales Tax as you need. You can have only one tax code of type Location for any given date range. This code cannot have a rate associated with it.
You can enter a tax code at the customer Ship-To and Bill-To business purpose level, as well as at the customer and customer address level. You can also assign tax codes to inventory items. If your tax method is VAT, you can include a tax code in the Tax Defaulting Hierarchy in the System Options window.
You can also specify whether a tax code is tax inclusive or tax exclusive. Tax inclusive tax codes automatically calculate the tax amounts for a transaction line and include this amount in the line amount in the Receivables Lines and Transaction Overview windows. See: Tax Inclusive.
Tax codes that you define here appear on your tax reports, in the Tax windows when you enter transactions, and in the Tax Groups window when you define your tax groups.
Prerequisites
To define your tax codes and rates:
1. Navigate to the Tax Codes and Rates window.
2. Enter a unique name for this Tax Code.
3. Enter a range of Effective Dates for this tax rate. The default start date is today's date, but you can change it. If you do not enter an end date, this tax rate will be valid indefinitely.
4. Choose the Type of tax rate you are defining. If you are using location based tax, you can only enter one tax code with tax type of Location Based Tax for a given date range. Choose 'Sales Tax' if you want this type of tax to appear on your sales tax reports.
5. If the tax type is not 'Location Based Tax,' enter a Tax Rate.
6. Indicate whether this tax code is positive or negative by setting the Sign parameter to either 'Cr' or 'Dr', respectively. When you use a tax code whose sign is 'Dr' (negative), Receivables debits your tax account. When you use a tax code whose sign is 'Cr' (positive), Receivables credits your tax account.
7. To allow tax exemptions for items using this tax rate, check the Allow Exempt check box.
8. To be able to change the tax rate for this tax code in the Transaction windows, check the Ad-hoc check box. You can only check this box if the tax type is not 'Location Based Tax.' You can update this option after you save this tax code.
9. If you want this tax code to automatically calculate inclusive tax, check the Inclusive Tax check box.
10. If you do not want to be able to change this tax code from inclusive to exclusive (or vice versa) when entering invoices, uncheck the Allow Override check box.
Note: Location-based tax codes are always tax exclusive and you cannot change them to be tax inclusive.
11. To update the Tax Account assigned to this tax code, open the Accounting alternative region. The default account is the Location Tax Account you defined in the System Options window. AutoAccounting uses this value if the AutoAccounting structure for your tax account is derived from the tax code.
12. To enter the VAT transaction type for this tax code, open the VAT Transaction Type alternative region, then enter a VAT Transaction Type (optional). This field is only used for Spanish and Belgian Tax reporting. For more information, see the Oracle Applications Spanish Globalizations Reference Manual or the Oracle Applications Belgium Globalizations Reference Manual.
See Also
AutoAccounting
Reviewing Sales Tax Rates
Tax Groups
Calculating Tax
Define system options