Managing Tax Automation

Tax Automation is a key process to provide data for the core tax calculation. It represents the links between the Book data and the Tax data. After you load Trial Balance data into the application, you can run the Tax Automation process to link tax-sensitive Book data to one of these Tax accounts:

  • Permanent Difference accounts

  • Temporary Difference accounts

  • Pre-Tax Income Adjustment accounts

  • Additional provisioning accounts

Using Tax Automation, the Financial Management system prepares the current provision process by copying the Net Income Before Tax amount from the entity’s Income Statement into the Net Income Before Tax entry of the current provision. This ensures that the starting point of the current provision equals the legal entity’s financial statements pretax income. The Tax Automation process can also be used to automate the amount of Net Income Before Tax adjustments that flow to the Current provision, for example, Book adjustments and Book reclassifications.