How Tax Configuration Options Are Used for Tax Determination

At transaction time, the owner of the transaction derives the configuration options that are used.

When you enter a transaction for a given first-party organization, the tax data applied to that transaction is determined by the:

Configurations defined for the combination of that first-party organization (business unit or first-party legal entity)
Tax regime derived from the addresses or from the tax classification codes used on the transaction

Settings That Affect the Application of Tax Data on Transactions

Use tax content subscriptions to define which configuration owner's setup is used for transactions for a specific first-party legal entity or business unit for a specific tax regime. Also, use tax content subscriptions to specify whether any shared content can be overridden by the subscribing party to allow unique, separate setup for certain tax content.

Tax content subscription options are:

Common configuration
Party-specific configuration
Common configuration with party overrides
Parent first-party organization with party overrides

How Tax Data Is Determined

Based on the defaults and tax rules you have defined, tax data is applied to transactions as follows:

Configuration for Taxes and Rules Option	Tax Content Available
Common configuration	The tax determination process uses only the tax content owned by the global configuration owner. If you manually override tax information on the transaction, only the tax content owned by the global configuration owner is displayed in the list of valid values available.
Party-specific configuration	The tax determination process uses only the tax content owned by the first-party organization, business unit or fist party legal entity, for whom the transaction is being entered. If you manually override tax information on the transaction, only the tax content owned by the first-party organization is displayed in the list of valid values available. Note: For the first-party organization it can be the business unit owning the tax content or the first-party legal entity-owned setup depending on the specific subscription being used.
Common configuration with party overrides	The tax determination process uses any tax content owned by the first party for whom the transaction is being entered. In the absence of tax content owned by that first-party organization, the tax determination process uses tax content owned by the global configuration owner. If you manually override tax information on the transaction, both the override tax content owned by the specific first party and the tax content owned by the global configuration owner that you haven't overridden are displayed in the list of valid values available.
Parent first-party organization with party overrides	The tax determination process uses any tax content owned by the first party for whom the transaction is being entered. In the absence of tax content owned by the first-party organization, the tax determination process uses tax content owned by the parent first-party organization. If you manually override tax information on the transaction, both the override tax content owned by the specific first party and the tax content owned by the designated parent first-party organization that you haven't overridden are displayed in the list of valid values available.

If you are using product exceptions, those exceptions are applied to the transactions as shown in the following table:

Configuration for Product Exceptions	Tax Exceptions Available
Common configuration	The tax determination process uses only the tax exceptions defined and maintained by the global configuration owner.
Party-specific configuration	The tax determination process uses only the tax exceptions owned by the specific first-party organization