1.7.6 Associate a Rate Code with an Issuer Class

The tax that applies on a coupon would be calculated at a specific rate. When building an issuer tax component, you have to specify the rate at which tax should be computed for a coupon. When you associate a rate code that you have maintained with a component, the rates corresponding to the component will be picked up. A rate code identifies the rate that applies on a tax. A rate code is built with attributes such as the following:

• The tax currency
• The basis amount currency
• The Effective Date
• The Exchange Rate Type and Category

Tax for the component to which you link a rate code will be computed by default, on the basis of these properties.

When maintaining a security, however, you can choose to waive the rate code altogether.