1. Accounting
  2. Taxation
  3. SuiteTax
  4. SuiteTax Engine
  5. Setting Up the SuiteTax Engine for VAT Countries
  6. Setting Up Tax Groups in SuiteTax Engine

Setting Up Tax Groups in SuiteTax Engine

Note:

You must use a role with the Tax Records permission added to create Tax Groups.

Tax groups are a convenient way of applying multiple tax rates to a transaction at one time. For example, you could create a tax group that combines the Goods and Services Tax (GST) and Provincial Retail Sales Tax (PST) rates, for sales transactions made in Canada.

A tax group is used either as an entity default tax code or as a nexus default tax code.

Tax groups can be used to reflect specific conditions and items for your sales and purchase transactions in tax schedules.

For example, you may have a tax group that includes U.S. standard rate tax codes for state, county, and city levels (TG1). If the county then applies a lower rate tax to a particular product, this lower rate can be reflected in another tax group (TG2) and included in the tax schedule.

Tax groups can also be used for withholding tax. Withholding tax (WHT) is a tax withheld by a buyer when making a payment to a seller, in which the full amount owed to that seller is reduced by the tax withheld. The amount of the tax withheld is then paid by the buyer to the tax authority on behalf of the seller. For example, an item costs $100, and the standard tax rate is 20%. The tax authority of a U.S. county then decides to apply a withholding tax. The seller and the buyer must then split the tax and pay 10% each. The buyer pays $110 to the seller and the remaining $10 to the tax authority on behalf of the seller. The seller also pays $10 to the tax authority.

In this example, the withholding tax becomes part of a tax group which contains a state applying the standard 20% tax rate, and the county applying a withholding tax of 10%.

To set up tax groups:

  1. Go to Setup > SuiteTax Engine > Tax Groups.

  2. Click New Tax Group.

  3. In the Name field, enter a name for this tax group.

  4. From the Nexus list, choose the nexus this tax group will apply to. Only the active nexuses assigned to the account will appear in this list.

  5. OPTIONAL: In the Description field, enter a sentence no longer than 500 characters describing this tax group.

  6. Choose at least one tax code from the Tax Codes list.

  7. Click Save.

General Notices