Understanding Tax Mapping

If your company conducts business in countries that use value-added taxes (VAT) and you incur reimbursable expenses, then, depending on that country's tax laws, your company might not be able to recover a portion of the VAT that you paid. For example, in Canada, the company can recover 50 percent of the tax for meals and entertainment.

You set up tax mapping for each expense category according to:

  • The country in which the employee resides.

  • The country in which the taxable expense was incurred.

  • Whether the expense is billable to the client.

The system uses the map to locate the appropriate tax rate area and tax explanation code.

For example, if an employee who resides in Canada enters an expense for the expense location Quebec and uses business unit 34, which is billable, the system tries to locate a tax explanation code and tax rate area from the Tax Mapping table (F09E105). The system uses the tax rate area and tax explanation code that you assign to the tax mapping record to determine the tax amount and the percent that is nonrecoverable. When the system creates the voucher, it calculates the taxable and tax amounts based on the tax information that you set up. If the system cannot locate a record in the Tax Mapping table, it does not assess tax for the expense.

Note: The system calculates VAT through the JD Edwards EnterpriseOne Accounts Payable system only. If your reimbursement method uses the JD Edwards EnterpriseOne Payroll system, the system does not calculate VAT.