Transaction Fiscal Classifications

Use transaction fiscal classifications to categorize transaction business categories so that multiple transaction business categories can be classified and a single transaction fiscal classification can be used within the tax rules.

This facilitates all of the applicable transaction business categories to trigger the relevant tax rule.

Transaction fiscal classifications provide a hierarchy of up to five levels. Each grouping of 1 to 5 levels is given a fiscal classification type group, which is used to retrieve all of the associated levels of one transaction fiscal classification type.

Assign each level a fiscal classification type code and name with associated start and end dates. Use the fiscal classification type code as the determining factor when you create tax rules. The start date must be before or equal to the earliest transaction date that use a tax rule associated with the applicable transaction fiscal classification.

Associate each fiscal classification type record with a tax regime that is used to create tax rules. This ensures that the list of values of the transaction fiscal classification is restricted by the tax regime for which the tax rule is being created.

Tip: Set the transaction fiscal classification start date to the earliest tax regime start date of any tax that uses the given transaction fiscal classification.

To create these transaction fiscal classifications:

On the Create Transaction Fiscal Classification Types page:
1. Save the current transaction fiscal classification type values.
2. Create transaction fiscal classification codes.
3. Associate business categories.
4. Specify tax reporting codes.
Use the Edit Transaction Fiscal Classification Codes page to create the level 1 fiscal classification code nodes.
1. Select the level 1 node.
2. Click the Create Child Node to create the subordinate levels. Create the subordinate levels up to the maximum levels defined for the transaction fiscal classification type group.
Associate the fiscal classification type record with one or more transaction fiscal classification codes. These codes are used to group the transaction business category, which is used in the tax rule as the condition set value.

Tip: While setting up the transaction fiscal classification, use different levels so that all of the necessary tax rules are defined at the highest level possible. This facilitates in minimizing the needed number of tax rules.

Associate and form a relationship between the transaction fiscal classification codes and the transaction fiscal classification. This relationship is used during transaction time to derive the transaction fiscal classification that validates the tax rules that use the transaction fiscal classification.

Use the Associated Codes Details region to define the relationship between transaction fiscal classification codes, the transaction business category codes, and the tax reporting codes. Use the Transaction Business Category Codes and the Tax Reporting Codes tab to define the relationship.

Transaction Fiscal Classifications in Tax Rules

The transaction fiscal classification tax determination factors allow you to use the transaction fiscal classifications in tax rules. A combination of determination factor class and determining factor represent these determination factors.

Use the transaction fiscal classification as the determining factor class and the specific transaction fiscal classification type as the determining factor.

Transaction Fiscal Classifications at Transaction Time

During transaction time, use the transaction business category entered on the transaction line to classify the transaction line. The application derives the transaction fiscal classification using the defined relationship between the transaction business category and the transaction fiscal classification.

The tax determination process uses the derived transaction fiscal classification and any associated parent records for the higher levels to compare against the relevant tax rules.