Setting up tax rules

Tax Rules explain how and when taxes are calculated. In documents, like sales orders, purchase orders or transfer orders the rule will be applied.

1. Select the Search icon , enter Taxes, and then choose the related link.
2. Select the Tax you want to create rules for, and then choose the Tax Rules action.
3. Fill in the fields on the lines as necessary. Hover over a field to read a short description.

The Movement Type field in the rule expresses how the tax for the rule should be applied:

• Taxed:
  • Sales
    • When you ship from bonded location to duty paid customer.
    • The Tax is included in the Sales Price. A Tax Ledger Entry will be created with the Tax Amount. The entry will be included in the declaration.
  • Purchase
    • Only theoretical, when you receive from bonded vendor in duty paid location.
    • The Tax is included in the Purchase Price. A Tax Ledger Entry will be created with the Tax Amount. The entry will be included in the declaration.
  • Internal
    • When you transfer from bonded location to duty paid location.
    • When you adjust (positive or negative) in a duty paid location.
    • When you consume from bonded location and post the output to duty paid location.
    • A Tax Ledger Entry will be created with the Tax Amount. The entry will be included in the declaration.
• Untaxed:
  • Sales
    • When you ship from bonded location to duty free customers and you want to register the transaction.
    • When you ship from duty paid location to duty paid customers and you want to register the transaction.
    • A Tax Ledger Entry will be created with the Tax Amount = 0.00. The entry will not be included in the declaration.
  • Purchase
    • When you receive from bonded vendor to duty free location and you want to register the transaction.
    • When you receive from duty paid vendor to duty paid customers and you want to register the transaction.
    • A Tax Ledger Entry will be created with the Tax Amount = 0.00. The entry will not be included in the declaration.
  • Internal
    • When you transfer from bonded location to bonded location and you want to register the transaction.
    • When you adjust (positive or negative) in a bonded location and you want to register the transaction.
    • When you consume from bonded location and post the output to bonded location and you want to register the transaction.
    • A Tax Ledger Entry will be created with the Tax Amount = 0.00. The entry will not be included in the declaration.
• Taxed + Charge:
  • Sales
    • When you ship from bonded location to duty paid customer.
    • The Tax is not included in the Sales Price. An item charge with the tax amount will be inserted in the document lines. A Tax Ledger Entry will be created with the Tax Amount. The entry will be included in the declaration.
  • Purchase
    • Only theoretical, when you receive from bonded vendor in duty paid location.
    • The Tax is not included in the Purchase Price. An item charge with the tax amount will be inserted in the document lines. A Tax Ledger Entry will be created with the Tax Amount. The entry will be included in the declaration.
  • Internal: Not applicable.
• Charge Only:
  • Sales:
    • The Tax is already paid and the Customer should be charged for it. An Item Charge will be inserted with the Tax Amount. A Tax Ledger Entry will be created with Tax Amount. The entry will not be included in the declaration.
  • Purchase:
    • The Tax is already paid but you want to register the tax as a charge to exclude it from for instance discount calculations. An Item Charge will be inserted with the Tax Amount. A Tax Ledger Entry will be created with Tax Amount. The entry will not be included in the declaration.
  • Internal: Not applicable.
• No Tax Registration:
  • Sales:
    • Movement not relevant for tax registration.
  • Purchase:
    • Movement not relevant for tax registration.
  • Internal:
    • Movement not relevant for tax registration.

See also

Design Details: Tax Calculation in Documents

Design Details: Charge Tax to Customers or from Vendors

Design Details: Connect Return Reason Codes to Reason Codes

To create a tax rule

1. Select the Search icon , enter Tax, and then choose the related link.
2. Open the relevant tax card, and then choose the Rules action.
3. Fill in the fields on the lines as necessary. Hover over a field to read a short description.

When a line is created for one item classification then the Add Item Classification action will create similar lines for all remaining Item Classifications. This will help you to create your setup in an efficient way.