Creating tax codes

After your company is set up, you must create tax codes and define how to use them.

  1. Select Financials > Payables > Tax Setup > Tax Codes.
    Or select Financials > Receivables > Tax Setup > Tax Codes
  2. Click Create.
  3. Specify this information:
    Tax Code
    Specify the tax code. This is the default value on taxable line items when invoices are created for customers that are assigned this default code.
    Description
    Specify the description of the specific tax information.
    Tax Type
    Specify the tax type:
    • Tax Table Code

      These codes have no rates assigned to them and are used to apply more than one tax code to a tax transaction. This is used to calculate a tax on a tax. If you select this option, then you must set up a tax table.

    • Stand-alone

      These codes have rates that are assigned and can be used as a stand-alone tax code or as a member of a tax table.

    • Table Member

      These codes have rates assigned, but can only be used in a tax table.

    • Calculated Rate

      These stand-alone tax types are restricted to Payables and Purchasing invoices and invoices. No tax rate can be set up in the Tax solution. The rate is calculated from the information that is provided on the invoice. Calculated tax type codes cannot be used in a tax table.

      Use when the tax amount on an invoice includes taxes from multiple taxing jurisdictions and the exact tax rate is unknown. Specify a tax amount on the invoice and prorate the rate to all taxable expense lines or invoice detail lines. The tax rate is calculated given the tax amount that is compared to the total amount of the taxable lines.

  4. Click Save.