This document describes how to define and manage sales tax in M3 BE when third-party system AvaTax is used to calculate sales tax on customer invoices. With this solution, the reporting and reconciliation of sales tax is performed in AvaTax.
AvaTax is used to calculate sales tax when customer invoicing is performed in M3. The required data from M3 is transferred to the AvaTax application, where the sales tax is calculated and returned to M3. The total tax amount is accounted in M3 and if the 'Update tax details' check box has been selected in 'Settings – Sales Tax' (CRS793), detailed tax information can also be reviewed in 'CO Invoice. Display Transactions' (OIS354) or 'MCO Invoice. Display Transactions' (COS354). All reporting and reconciliation of sales tax is performed in AvaTax.
This configuration is required to enable the functionality:
Specify the tax method of the division in 'Company. Connect Division' (MNS100/G). Select alternative 3, 4 or 5 for parameter 'Tax method' based on these rules:
3, to calculate AvaTax sales tax on customer invoices. No tax is calculated on supplier invoices.
4, to calculate AvaTax sales tax on customer invoices and VAT/GST on supplier invoices.
5, to calculate AvaTax sales tax on customer invoices and M3 Sales tax on supplier invoices.
Specify the integration settings in 'Integration Settings - Tax Interface' (CRS794).
Specify settings for sales tax in 'Settings – Sales Tax' (CRS793).
Tax codes are managed in 'Tax Codes. Open' (CRS130).
The address information is required to determine the taxing jurisdiction. Address line 1 and 2 are used for the street address. The city and the postal code are sent to AvaTax to determine the destination address.
Select the AvaTax use code in (CRS610/L). This field is used to identify the type of transaction to be taxed.