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Agenda
Business Scenario
ABC Inc. is in the business of buying and selling Computers in the states of California and Texas . The applicable Sales Tax is at a standard rate is10 % and 12% respectively.
Legal Entity Parties Place
Product Tax
Key Concepts
Tax Regime
Tax Regime is the level at which similar taxes governed by common tax rules or laws are grouped together.
In our Business Scenario, Regime will be United States Taxation Regime. Other Examples for different Regimes can be : Excise Tax in India. (Value Added Tax )VAT Regime in UK.
Key Concepts
Taxes
A charge imposed by a government through a fiscal or tax authority. EBTax supports only Indirect (Transaction) taxes. There can be multiple taxes under one regime.
In our Business Scenario, applicable Tax will be US Sales & Use Tax. Other Examples for different Taxes can be : Excise Tax in India. Value Added Tax (VAT) in UK.
Key Concepts
Tax Status
Tax Status is the taxable nature of a product or service. It is a way of grouping different tax rates under one single tax. Provide additional granularity for reporting. There can be multiple tax status under a tax but at least one has to be specified as a default status. More useful for European Taxation
In our Business Scenario, applicable Status will be Standard Status.
Other Examples for different Status can be : Reduced Rated Zero Rated
Key Concepts
Tax Jurisdiction
A geographic area for which tax is levied by a specific tax authority. There can be multiple jurisdictions for a tax but at least one has to be specified as a default jurisdiction. In our Business Scenario, applicable Tax Jurisdiction will be : State of California, State of Texas.
Other Examples for Tax Jurisdictions can be : Tax applicable uniformly in UK, will have a Tax Jurisdiction directly at Country level. Tax Jurisdiction for Goods and Services Tax in Singapore will be the Country of Singapore.
Key Concepts
Tax Rate
The rate specified for a tax status for a period of time. Tax rate is generally expressed in terms of percentage. In EBTax we can also express in terms of quantity. There can be multiple tax rates under a tax status but at least one has to be specified as a default rate.
In our Business Scenario, applicable Tax Rate will be : California 10% Texas 12% Other Examples for different Tax Rates can be : UK Standard VAT Rate 17.5%. Sweden Standard VAT Rate is 25%.
Tax
Tax Status
Standard
Tax Jurisdiction
California
Texas
Tax Rate
10 %
12 %
REGIME
TAX
STATUS JURISDICTION TAX RATE California Texas San Mateo Dallas Belmont Dallas 7.25% 5% 4% 3% 2% 1%
Standard
Key Concepts
Place of Supply
Decides which location to be considered for tax calculation.
The different options available are : Ship To Bill To Ship From Bill From Ship To, Use Bill To if Ship To not found For Example : Goods Sold from California to Texas then - If we want California Tax to be applicable then we will define Bill / Ship From as the place of supply, - If we want Texas Tax to be applicable then we will define Bill / Ship To as the place of supply.
Key Concepts
Place of Supply
Available LOV
Bill From
The Supplier site mentioned at LE address Header level on invoice Ship From The Supplier site mentioned at Warehouse Address given as additional Header level on invoice information Bill To OU Address - Can be checked in Customer site Bill To address given on PTP the Invoice Ship To The Ship To Location mentioned at Customer site Ship To address given on Line level on invoice the Invoice Ship to, use bill to if The Ship To Location mentioned at Customer site Bill/Ship To address Line level on invoice given on invoice ship to is not found
Key Concepts
Registration
If there is a rule based on registration status then decides whose registration status to be considered for tax calculation.
The different options available are : Ship To Bill To Ship From Bill From Ship To, Use Bill To if Ship To not found
Key Concepts
Registration
Key Concepts
Taxable Basis & Tax Amounts
Taxable Basis
Determines the amount on which the tax rate should be applied. The options are Line Amount Tax Formula (Prior Tax, Compounding, Assessable Value) Determines how tax will be calculated for each applicable tax on the transaction. The options are Standard_TC :- Line Amount (x) Tax Rate Compounding of tax Rate
Determine where the transaction is deemed to take place Determine Applicable Tax Regimes Determine Candidate Taxes Determine Place of Supply And Tax Registration
Tax Rate
Taxable Basis
Tax Calculation
1 REGIME CREATION 2 TAX & STATUS CREATION 3 JURISDICTION & RATE CREATION 4 DEFAULTS 5 TAX CALCUALTION IN AP WORKBENCH 6 MANUAL OVERRIDE IN AP 7 TAX CALCUALTION IN AR TRANSACTION 8 7 TAX CALCUALTION IN PO TRANSACTION 9 TAX CALCUALTION IN SALES ORDER TRANSACTION
QUESTIONS ANSWERS
Thank You.