Tax Point Basis

Comply with tax regulations by assigning the correct tax point basis for a tax. The value you select determines the event at which the taxes for an invoice are reported.

The following table describes the tax point basis values:

Tax Point Basis	Result
Payment	If a tax on a purchase invoice has Payment as the tax point basis, then the recoverable tax is debited to an interim account on invoice accounting. On accounting for the corresponding payment, a proportionate tax amount is recovered and the same is reported as of that payment date. The approach is the same for the tax liability on a sales invoice.
Invoice	A tax point basis of Invoice is the default where the tax recovery and liability are reported as of the invoice date.
Accounting	Specify the tax point basis as Accounting for a tax when the tax authorities mandate that tax recovery and liability occur on accounting for an invoice. You must report on the accounting date for the invoice.
Delivery	For taxes you can claim tax recovery on receipt of corresponding goods, specify the tax point basis as Delivery. Taxes on the invoice are calculated with the tax rate as of the receipt date. These tax lines are reported as of the receipt date. For the sales transactions, the shipment date is be used as a basis for tax rate determination and accounting. If the tax authorities mandate that the recovery is accounted on the goods receipt event, then: Enable the Allow delivery-based tax calculation option for the configuration owner tax options that you created for the relevant business unit or legal entity. Specify the Report Delivery-Based Taxes on option as Receipt. This configuration enables recoverable taxes with tax point basis of Delivery to be accounted on receipt accounting. For consigned purchases, consumption of goods is the event at which ownership changes. Consumption of goods is the event at which recoverable delivery-based taxes is accounted.

Exception Configuration for Tax Point Basis

If tax regulations require tax point basis to vary based on party registration, then specify tax point basis at the tax registration or a tax registration rule. You can also specify tax point basis at tax rate to meet specific needs. When these exceptions are configured, then the tax calculation process considers the following order of evaluation, with tax being the most generic option when the prior specific options aren't configured.

• Tax registration rule

• Tax rate

• Party tax registration

• Tax