This activity is used to enter basic data to control the tax handling/functionality of your company.
The tax liability for the customer/supplier in combination with tax codes and how the Tax Code Validations are set up on your company IFS Enterprise/Company/Tax Control tab, determines which tax information to be fetched.
In IFS Enterprise/Company/Tax Control/General tab, you define on which level taxes shall be validated.
For customer tax validation, you select object level, address level or transaction level. If checkbox Object Level is selected, it is required to enter tax information on sales items (e.g. sales object, sales part, non-inventory sales part, package part, sales charge type and report code for projects). If checkbox Address Level is selected, it is required to enter tax information in window Customer, tab Address/Delivery Tax Information/Supply Country. If checkbox Transaction Level is selected, it is required to enter a tax code on transactions (e.g. customer orders, sales quotations and various types of customer invoices).
For supplier tax validation, you select object level or transaction level. If checkbox Object Level is selected, it is required to enter tax information on sales items (e.g sales object and purchase part). If checkbox Transaction Level is selected, it is required to enter a tax code on transactions (e.g purchase orders and various types of supplier invoices).
Information should be entered for the company in the General tab of the Company window.
As a result of this activity, the tax handling will be controlled by parameters defined for the company.
Before you begin, verify that the correct company ID appears in the header of the Company window.
On the Tax Control/General tab:
Enter Tax Code Validations for the company. For Customer Tax, select Object Level, Address Level or Transaction Level. For Supplier Tax, select Object Level or Transaction Level.
Select Tax Liability, from the List of Values to specify the tax liability optionally for the company. Available tax liability values for companies in all countries are TAX and EXEMPT. Additional values may be defined for each country and they will appear automatically in the List of Values depending on the country defined for the company. There are two tax liability types which can be attached to the tax liabilities, taxable or exempt. Tax liability values and tax liability types are defined in the Tax Liabilities window. Selected tax liability will be used for tax reporting as well as for printing on legal documents such as invoices.
Select Tax Rounding Method from the List of Value.
Select Modify Tax % in Tax Codes check box if you want to enable the possibility of modifying tax percentage (%) of already used tax codes in Tax Codes window. Note: It is possible to modify tax percentage only for the tax code(s) of type Tax or Use Tax and if Tax Method is Invoice Entry or Final Posting.
Select Max Overwriting Level on Tax for the company. Either in percent or in accounting currency.
Save the information.
On the Tax Control/Invoice tab:
Select the default Amount Method, whether net or gross amount should to be used when invoices are to be entered.
Select Tax Rounding Level, from the List of Values. There are two options, Line Level and Total Level.
Select an Invoice Fee Tax Code, from List of Values, if tax is applicable for invoice fees.
Select the Tax Correspondence, Invoice Lines - Postings check box if you if you want the system to verify that the total amount per tax code on the posting lines equals the corresponding net amount on the invoice lines.
Select the Correspondence, Invoice Net Amount - Tax Withholding Base Amount check box if you want the system to verify that the tax withholding total net amount of the tax code (tax base amount) equals the total net amount of the invoice lines per tax code. This only applies for supplier invoices when the withholding base amount specified for the supplier is Invoice Net Amount.
Select the Tax Amount Limit, Outgoing Invoice Lines check box if you want the customer invoice tax lines and outgoing supplier invoice tax lines to be checked against the tax amount limits for each tax code. If the tax amount in the invoice line is within the tax amount limit for the tax code, then tax will not be posted for the invoice.
Select the Supplement Tax Withholding check box if you want to add special report codes to tax lines based on tax codes whose tax type is Tax Withhold. Only applicable if withholding tax is used.
Select the Use Tax Invoice check box if you want to create a tax invoice for showing details of the type and value of goods sold or the services provided, and the tax amount. It is used as evidence for claiming input tax credit. The tax invoice will be printed when true tax transactions are created within the invoicing and payment process except when creating advance invoices.
Select the Post Preliminary Tax Withholding check box if you want a voucher created for tax withholding at the time of posting the invoice. Note: The value of this check box is not considered for customer tax withholding.
Create a new record in the Tax Liability Countries table.
In the Country field, select the country in which the company is liable for tax.
In Tax ID Type field select a tax ID type if required for the country. For countries other than EU countries, if the entered Tax ID Number is to be validated it is required to enter a Tax ID Type. Note: EU country Tax ID Number validation will be based on the country code prefix in Tax ID Number.
Note: If the Tax ID Type is defined in Tax ID Types for a country code it will be mandatory to enter a Tax ID Type. A predefined Tax ID Type GBTAX has been introduced for country code GB for the Tax ID Number validation functionality. Therefore, if the user requires to create a Tax ID Number for customer, company or supplier with no Tax ID Type for GB it will require to manually delete the predefined Tax ID Type for country code GB.Enter a tax ID number in the Tax ID field.
Modify the dates displayed in the Valid From and Valid Until dates if required.
Repeat steps 11-13 in order to enter more tax liability countries for the company.
Save the information.
On the Tax Control/Sales and Procurement tab:
Select Tax Code.
Select Tax Free Tax Code.
Select if the customer order shall be Taxable, Use Price Incl Tax or Modify Tax % on Transactions.
Enter Tax Paying Party, from List of Value. No Tax, tax is not applied for free of charge customer order lines. Customer, tax should be paid by the customer for free of charge customer order lines. Company, tax should not be paid by the customer for free of charge customer order lines instead company will bear the cost of tax amount.
Enter Tax Paying Threshold Amount. Tax applies for free of charge customer lines only if tax calculation basis for FOC exceeds the tax paying threshold amount.
Select if purchasing shall be Taxable or Use Price Incl Tax.
Save the information.
On the Tax Control/External Tax System tab:
Select the External Tax Calculation Method from the List of Value, i.e Not Used, Vertex Sales Tax Q Series, Vertex Sales Tax O Series or Avalara Sales Tax. This method is used when creating tax lines based on address for sales quotation, customer order, customer order invoice and return material authorization. If Not Used is selected, tax rates defined in the Tax Codes window will be used. If Vertex Sales Tax Q Series or Vertex Sales Tax O Series is selected, software from Vertex must be installed. The tax rates will then be retrieved from the Vertex rate database. If Avalara Sales Tax is selected, tax rates will be fetched from Avalara Sales Tax software provided the integration is set up.
Enter Generic Tax Codes for City, County, District and State. These generic tax codes are used for companies using an external tax system.
Select the Refresh Tax Information at Release of Customer Order if you want to send a tax request to the external tax system when the customer order is released.
Save the information.