Skip to main content

How do I set up sales tax?

A line's taxes are the tax codes that are both in its Tax Group (what is sold) and its Tax Zone (to whom or where), and valid on the date. Set up the authority, the codes with rates, the groups and zones, then give each code an account on the sales tax Posting Profile.

Screen
Tax Controlling › Tax Authority, Tax Code, Tax Group, Tax Zone; General Ledger › Posting › Posting Profile
Who
The tax accountant with the implementation consultant
Takes effect
For documents dated in the rates' ranges
Needs first
The tax payable and receivable accounts released

Steps​

  1. Tax Authority - one per authority (federal, each province).
  2. Tax Code - one per tax: Apply On, rounding, value lines with From Date, To Date and rate. Release it.
  3. Tax Group - one per kind of goods or service, listing the codes that can apply. Release it.
  4. Tax Zone - one per kind of buyer or place, listing the codes that apply there, Exempt where they do not. Release it.
  5. Posting Profile, category sales tax: one line per tax code, post key and side, with its account.
  6. Give items, customers and vendors their tax group and zone on their own screens: Sales Tax Group and Purchase Tax Group on Item In Legal Entity, Tax Zone on Customer In Legal Entity and on Release Vendor In Legal Entity.

Check it worked​

  • A sales order line for an item of the group, to a customer of the zone, shows the expected tax lines.

If something looks wrong​

  • No tax comes up. The date is outside the code's value lines, or the code is not in both the group and the zone, or it is exempt in the zone, or not released.
  • "Account is not configured in Posting Profile ... against Post Key ..." Step 5.