General Setup for the Japan Localization

Perform the following steps to set up Japan Localization:

In the Tax Systems form, set the Tax Mode for Tax System 1 to Item.
In the Tax Parameters form, enter a starting tax period date.
In the Tax Jurisdiction form, define tax jurisdictions for each tax system.
In the Tax Codes form, define tax codes for Tax System 1, using tax rates and tax jurisdictions.
- Define A/R and A/P tax accounts. Use separate accounts that correspond to the Output and Input components for the Consumption Tax.
- Use the Next Level Tax Code feature to define hierarchical relationships that govern different tax rates that correspond to national and prefecture/local tax jurisdictions.
In the Billing Terms form, define terms. This information includes the cutoff day for generating invoices, the month to forward, the payment day and the holiday offset for defining the due date.
In the Customers form, define customers. Assign a Billing Terms code from step 5. Define the Consumption Tax Round Method and the Consumption Tax Header or Line Method. These rates are defined for the Bill To customer only. Together they define the methods used for calculating Consumption Tax amounts. You can also select the Shipment Approval Required field. This field designates whether order shipments require the procedure for approval and posting before order shipments may be invoiced; yes if selected, no if cleared.
In the Holidays form, define the holidays necessary for the invoicing process. The holidays, together with the billing terms code and the customer information, determine the Invoice Due Date.
In the Items form, define your items. Assign the tax code that you defined in step 4.

Notes:

When you ship orders to your customers, use the Order Shipments form to record customer approval for shipments.
When you invoice the orders, use the Order Invoicing/Credit Memo form.
To view your Consumption Tax liabilities and gather information to fill out the Consumption Tax return, run the Consumption Tax Report.