Learn About Tax Automation

In Tax Reporting, Tax Automation is a key process to provide data for the core tax calculation. It represents the links between the Book data and Tax data. After you load Trial Balance data into the application, you can run the Tax Automation process to link tax-sensitive Book data to one of these Tax accounts:

  • Permanent Difference accounts
  • Temporary Difference accounts
  • Pre-Tax Income Adjustment accounts
  • Additional provisioning accounts


As a best practice, Equity accounts should be segregated from P & L accounts. For the Equity account, you should target the Equity Automated column.

Using Tax Automation, the system prepares the current provision process by copying the Net Income Before Tax (NIBT) amount from the entity’s Income Statement into the Net Income Before Tax entry of the current provision. This ensures that the starting point of the current provision equals the legal entity’s financial statements pretax income. The Tax Automation process can also be used to automate the amount of Net Income Before Tax adjustments that flow to the Current provision, for example, Book adjustments and Book reclassifications.

To enhance the flexibility of tax automation, you can create multiple tax automation rules for each account, to which you can apply more than one rule, or assign more than one Source Account or MultiGAAP Source Account. There are no restrictions on the number of rules that can be created. The additional rules enable you to define the Logic to be applied (Pull, Move or Squeeze) . You can create rules that use multiple Pull, Move or Squeeze rules within a single rule, or define multiple rule combinations for more complex requirements that incorporate a flow within a rule, such as both Pull and Squeeze. For each rule, you can also select a different Source Account or MultiGAAP Source Account, enabling you to manage multiple source accounts more easily.

You can run Tax Automation for both National and Regional accounts.