Setting Up Tax Rules

Access the Tax Rules Revisions form.

Company

Enter the company for which you define the tax rules. If you do not define rules for a specific company, the system uses the rules that you define for company 00000.

Tolerance Rate - Warn

Enter a number that specifies the maximum percent of change that you can make to the tax amount on an invoice, voucher, or journal entry before the system issues a warning message. For example, if you specify 5.00, the system allows you to change the tax amount for a transaction by up to 5 percent without issuing a warning message. The system issues a warning message for changes to the tax amount when the percent of the change is between the percent specified in the Warning field and the percent specified in the Error field.

This system uses the tolerance limits only for tax explanation codes V, B, and C. For all other tax explanation codes, the system issues a warning regardless of the change.

You must select the option Allow Understatement of Tax Amt before the system allows you to understate the tax amounts on AR invoices by up to the percent specified.

Enter the percent as a whole number. For example, to specify 5 percent, enter 5.00 instead of .05.

(COL) Enter 1 for Colombian companies.

Tolerance Rate - Error

Enter a number that specifies the maximum percent of change that you can make to the tax amount on an invoice, voucher, or journal entry before the system issues an error message. For example, if you specify 10.00, the system allows you to change the tax amount for a transaction by up to 10 percent. If the percent of the change exceeds the tolerance limit that you specified, the system does not allow the change. The system issues a warning message for changes to the tax amount when the percent of the change is between the percent specified in the Warning field and the percent specified in the Error field.

The system uses the tolerance limits only for tax explanation codes V, B, and C. For all other tax explanation codes, the system issues a warning regardless of the change.

You must select the option Allow Understatement of Tax Amt before the system allows you to understate the tax amounts on AR invoices up to the percent specified.

Enter the percent as a whole number. For example, to specify 10 percent, enter 10.00 instead of .1.

(COL) Enter 0 for Colombian companies.

Amt (amount)

Specify whether the tolerance that you use to generate warning or error messages is based on a percent or an amount.

% (percent)

Specify whether the tolerance that you use to generate warning or error messages is based on a percent or an amount.

Tax on Gross Including Discount and Tax on Gross Excluding Discount

Select this option to calculate the tax amount based on the gross amount, including the discount.

(COL) Select the Tax on Gross Including Discount option.

Discount on Gross Including Tax

Select this option to specify whether the system calculates the discount based on the gross amount, including the tax amount.

Sales Order Taxes at Order Level

Select this option to specify whether the system calculates taxes and performs rounding for sales orders at the detail level or the order level.

The system calculates taxes at the detail level. The system calculates the tax on each detail line item, and then sums the detail line items for the order.

The system displays this field only when you select the option for AR.

Allow Understatement of Tax Amt

Select this option to specify whether you can override the tax amount on an AR invoice to be less than the system-calculated tax amount. The system displays this field only when you select the option for AR. This option applies to tax explanation codes V and B only, and the amount of the understatement must be within the defined tolerance limits.

The system does not allow you to understate the tax amount. The system generates an error.

Note: If you use tax explanation code S, the system allows you to understate the tax amount if it is within the defined tolerance limits, regardless of the setting of this option.

(Release 9.2 Update) Voucher Match Tax Rounding

Select this option to perform soft rounding of taxes for voucher match at the tax explanation, tax area, and tax rate level. If you do not select this option, the system performs soft rounding of taxes at the tax explanation and tax area level.

The system displays this field only if you select the A/P option.