To set up tax codes by country

This functionality is specific for India.

To set up tax codes by country, take the following steps:

  1. In the Tax Codes (tcmcs0137m000) session, define a tax code for each type of tax, including tax types with zero tax amounts.

  2. In the Tax Codes by Country (tcmcs0136s000) session, set up the tax details, among others:

    • Specify whether the tax consists of a single tax rate or of multiple tax rates, for example, for sales tax. For transactions to which other kinds of tax also apply, you must set up a multiple tax code.

    • If required, add text to the tax codes that contains the reference to the applicable tax law chapter. LN prints the text on invoices with this tax code.
  3. For a singular tax code, define the tax rate in the Single Tax Rates (tcmcs0132m000) session. You can select Single Tax from the appropriate menu of the Tax Codes by Country (tcmcs0536m000) overview session.

  4. For transactions to which other kinds of tax also apply, you must set up multiple tax codes. Take the following steps:

    • Specify the details in the Multiple Tax Code Lines (tcmcs0535m000) session. You can select Multiple Tax from the appropriate menu of the Tax Codes by Country (tcmcs0536m000) overview session. For each type of tax, set up a tax code line. For details, refer to To set up sales tax.
    • Define the tax rates of each tax code line in the Multiple Tax Rates (tcmcs0133m000) session. You can select Multiple Tax Rates from the appropriate menu of the Multiple Tax Code Lines (tcmcs0535m000) overview session.

  5. For each financial company, specify the ledger accounts to which LN must post the tax amounts, . In each financial company of your system, use the following sessions:

    • Posting Data for Single Tax Codes (tfgld0571m000) for single tax codes.
    • Posting Data for Multiple Tax Codes (tfgld0570m000) for multiple tax codes.
  6. To set up specific tax codes at state level, you can define tax code exceptions as described in To set up the tax rates.
  7. If you prepare tax declarations based on a tax declaration master, you must also define a tax settlement tax code. LN links the Tax Settlement tax code to the payments you make to the collection office. On the tax analysis reports, this tax code represents the tax payments.
  8. Approve the tax codes

    Ensure that all the tax code details are correct, and in the Tax Codes by Country (tcmcs0136s000) session, select the Approved check box. LN performs a consistency check on the tax code details.

    After you approve the tax code, you can no longer change the following details:

    • Kind of Tax
    • Tax Type
    • Singular Tax
    • Expense Purchase Tax
    • Group Tax
    • Tax Category
  9. Add the tax code to a group tax code

    For transactions to which TDS applies, in addition to sales tax, you must define a group tax code and add the sales tax code to the group tax code. For details, refer to To set up a group tax code. Before you can add a tax code to a group tax code or test the tax model, you must approve the tax codes. LN can only link approved tax codes to the transactions.

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