Tax Definitions

You use the Tax Definitions program (P76A10) to set up basic tax information that includes:

• The customer type and customer category code to use to determine the tax.

• The GL class that the system uses to configure the tax automatic accounting instruction (AAI). AAIs are used to move taxes from the trade account to the final account.

• The invoice line in which tax will appear.

• The column of the VAT Sales Subledger report in which the tax will appear, which ensures that the taxes calculated for credit notes are equal to those of the invoices to which they are related.

• Whether taxes should be split in Invoice B.

  Legally, Invoice B taxes should be included in the unit price. However, some taxes are exempt from the law and, therefore, must be separated in all instances, including Invoice B.

• The hierarchy that the system uses to process the tax values.

  You can specify whether item hierarchy or customer hierarchy is used. The hierarchy is hard-coded. The processing method uses the item or customer combinations to look for the value of the tax, but does not change what you can access.

• The end date, tax calculation date, and tax category.