Setting Up Tax Area Relationship

Access the Tax Areas Relationship form.

Note: You can set up all the auto-withholdings on the related Tax Areas table, and use the Main Tax Area field to calculate the taxes, such as VAT.

Main Tax Area

Enter a code that identifies a tax or geographic area that has common tax rates and tax authorities.

The system validates the code that you enter against the Tax Areas table (F4008). When you create an invoice or voucher, the system uses the tax rate area in conjunction with the tax explanation code and tax rules to calculate tax and G/L distribution amounts.

Tax Area 1

Specify a code that was previously set up on the Tax Rate/Areas program (P4008). You cannot leave this field blank.

The system uses this tax area with Main Tax Area and Tax Area 2 to retrieve an additional set of GL offsets and their tax rate, and to calculate taxes, withholdings, or auto-withholdings.

Tax Area 2

Specify a code that was previously set up on the Tax Rate/ Areas program (P4008). You cannot leave this field blank.

The system uses this tax area with Main Tax Area and Tax Area 1 to retrieve an additional set of GL offsets and their tax rate, and to calculate taxes, withholdings, or auto- withholdings.

Note: (Release 9.2 Update) The Tax Area Relationship Setup program (P76C0005) is modified to allow you to setup more than two related tax areas.