When you attach the tax group name to an invoice line, you automatically make the invoice line eligible for MTD processing. MTD will check which account the invoice line is using and look to see which, if any, accounts fall in the tax credit segment ranges. Depending on how you have defined the formula and tax credits based on this information, the tax values are expanded to one or more expense, liability, or receivable accounts, in conjunction with the tax formula. This occurs regardless of whether or not you process tax on an inclusive or exclusive basis.
Depending on which market sector you work in and the types of goods and services that are purchased, you must determine how your taxes are configured. Generally, tax is not paid in the federal government sector. Commercial sectors may get back 100% of the federal tax or they might get nothing back.
The MUSH sector is eligible for a graduated rebate system which may get back only 57% of the federal tax or possibly qualify for rebates of 57% and 25% respective because the same good/service meets the criteria for two of the rebates. The MTD globalization is built to deal with these types of tax cases.
Self-assessed tax requirements are also a part of the MTD functionality. If you find that you need to remit un-invoiced tax to a tax authority, you can use a Tax Type of Use and incorporate the Tax Type into the tax formula.
Attention: There is only one tax group allowed per invoice.
Suggestion: Sketch out the different tax formulas and rebate results that your
organization expects before you begin your implementation. These formulas will tell you
which tax codes and rebates must be up as well as your expected outcome. See Multiple Tax Distribution Formula for examples.