21.1.6.1 Features of Tax Details Screen

The reference number of the deal leg for which you are defining transaction tax details are displayed. The screen will contain a list of all the tax components applicable to the deal leg.

Associating a tax component to a deal leg

All the transaction tax components applicable to the deal leg you are processing will be displayed together with the rule that was linked to the component. In this section of the screen you can:

• Change the tax rule linked to the component
• Disassociate a tax component from the deal leg

Changing the tax rule linked to a component

The rule that is linked to a tax component is displayed next to the component. To link a new rule to the component. A list of all the tax rules maintained will be displayed. Select the appropriate rule from the pick list. The new rule will be made applicable to the component.

Disassociating a tax component from the deal leg

Disassociate a tax component from the deal leg. In the 'Association' section of the Transaction tax screen, click against the waive option positioned next to the component. In this case, the tax component is attached to the deal leg but is not calculated.

Indicate the tax components to be applied to a deal leg

In the application section of the screen, you can indicate the tax components that should be applied to the deal leg. The list of components that is displayed depends on the tax components that you have associated with the deal leg. The following details of the component are also displayed:

• The basis component on which the tax is levied
• The currency of the basis amount
• The basis amount
• The tax amount and the
• The currency in which the tax amount is defined.

Change the tax amount that is calculated using the class applicable to the component.

Waiving tax on a deal leg

You also have the option to waive the component for the deal leg that you are processing. If for some reason you want to waive tax on the deal you are processing, you can do so by checking against the 'waiver' option in the application section of the screen. The tax will be calculated but not applied.

Note:

You can waive tax only if it is yet to be liquidated.

Tax liquidation

When a tax component that is applied to a deal is liquidated, the relevant accounting entries are passed. The contract tax screen displays:

• The tax components that have already been liquidated
• The amount that was liquidated
• The currency in which it was liquidated