Tax Code
A tax code is one tax with its rates over time. Which tax codes apply to a sales or purchase line is decided by the line's Tax Zone and Tax Group: every code that is in both, and valid on the document date, is charged. Rates are kept by date, so a budget-day change is a new rate line, not a new code.
What it is for
The rule people get wrong: the rate lives on the value lines, by date. A document dated outside every value line's dates gets no tax from this code, without any message.
Every field in plain words
| Field | What it means | What to put |
|---|---|---|
| Tax Code | The code | Required. Unique in the company |
| Name | The name | Required. Unique |
| Tax Code Type | The kind of tax | Picking the sales tax type shows the digital invoicing fields |
| Authority Sale Type, Authority SRO Schedule No | How the tax authority's digital invoicing classifies the sale (the sale type, and the schedule or notification it falls under) | Shown for the sales tax type. Authority Sale Type is required when the company sends invoices to the tax authority |
| Tax Authority | Who the tax is paid to | Required. From Tax Authority |
| Settlement Period | How often it is settled | Optional. From Tax Settlement Period. Recorded only |
| Print On Invoicing, Unit, Tax On Tax | Recorded only | |
| Apply On | The amount the rate is charged on | Required. See below |
| Rounding Method, Rounding Precision | How the tax amount is rounded | As on Currency Legal Entity: none, down, up or nearest, to this many decimals |
| Posting Profile | The sales tax posting profile whose accounts this tax posts to | Optional. Empty uses the default sales tax profile |
| From Date, To Date, Value, Tax Base Value % (lines) | The rate, in percent, for a date range; for retail-price taxes, the share of the retail price that is taxed | From Date, To Date and Value required |
Apply On
- Net: the rate is charged on the line's net amount.
- Gross: on the line's gross amount.
- xNet, xGross: on the net or gross amount plus the other taxes already worked out for the line (a tax on tax).
- Retail: on the retail price, reduced to Tax Base Value % of it when that is filled (a tax on printed retail price, as under the third schedule in Pakistan).
A value line with a positive rate is marked I, and one with zero or a negative rate O. Posting recipes can use the mark to choose the post key.
The arithmetic
Tax = base × Value ÷ 100, then rounded by the code's rounding. Retail and Net or Gross taxes are worked out first; xNet and xGross taxes after, on the base plus those taxes. A code marked Exempt in the line's tax zone gives 0.
How to configure it
- Release the code: lookups offer only released tax codes.
- One code per tax and rate kind: standard sales tax, reduced rate, further tax on unregistered buyers, and so on.
- Put each code in the Tax Groups and Tax Zones where it applies.
- Give the code an account on the sales tax Posting Profile, one line per tax code and side.
Scenarios
- Rate rises from 17% to 18% on 1 July. Set To Date of the 17% line to 30 June; add a line from 1 July at 18.
- A further tax of 3% when the buyer is unregistered. A code for it, in the tax zone of unregistered buyers only.
- Tax on retail price for packaged goods. Apply On Retail.
If something looks wrong
- "Tax Code - Basic Data lines cannot be empty" Add a value line.
- "Taxcode cannot be empty" Fill Tax Code.
- A document shows no tax. Check the document date is inside a value line, the code is released, and the code is in both the line's tax zone and tax group, not blocked, and not Exempt in the zone.
- A value line with From Date after To Date is accepted. The screen does not check it; such a line never applies.