| Setting up the tax-provider interfaceAfter the tax provider is installed on the LN server, you must set
up the interface between LN and the tax provider. To set up a tax provider: - Prepare the tax-provider interface implementation
- Implement the tax-provider interface
- Adjust the tax-provider interface setup
Step 1. Preparing the tax-provider interface
implementationBefore you implement the tax-provider interface, take the
following steps: - Use the Countries for Destination Sales Tax (tctax6103m000) session to specify the countries
for which the tax provider must compute the tax amounts and keep a sales-tax
register. For orders with ship-to addresses in other countries, LN computes the tax
amounts.
- Verify that
existing addresses in the countries specified in step 1, have the format that
is required by the tax provider. The city, state/province, and ZIP/Postal code
for U.S. and Canadian addresses must be entered in the correct address fields.
- Correct and convert the addresses with deviating formats.
You can use the Address Conversion Utility for Taxation (tctax6211m000) session to correct addresses with specific deviating
formats. You must correct addresses with other incorrect formats by using the Addresses (tccom4130s000) session.
- Install the tax provider using the instructions provided
by the tax-provider vendor.
- Close the fiscal period using the Close Periods (tfgld1206m000) session.
Step 2. Implementing the tax-provider interfaceTo implement the tax provider interface, take the
following steps: - Select the Destination Sales Tax Applicable check box in the COM Parameters (tccom0000s000) session.
- Select the Use Tax Provider check box in the Tax Provider Parameters (tctax6100m000) session.
- Select the tax provider in the Tax Provider Parameters (tctax6100m000) session. The tax provider must be Vertex's
"O" series for Sales and Use Tax.
- Define the environment variables that are specific to the
tax provider, by following the installation instructions in the LN Tax User Guide.
- Enter the countries to which the tax provider applies, in
the Countries for Destination Sales Tax (tctax6103m000) session. If the ship-to business
partner's address is located in one of these countries, LN does not compute the
tax amounts but passes on the tax data to the tax provider. For ship-to
addresses in other countries, LN computes the tax amounts.
- Verify and assign GEO codes to existing address data by
using the Address Jurisdiction Verification Utility (tctax6210m000) session.
- Evaluate the GEO codes and redefine the codes if necessary.
- If you use
Vertex, perhaps you need to change the default selection of the Inside City Limits check box in the Addresses (tccom4130s000) session.
- If more than one
jurisdiction corresponds with the address data, on the appropriate menu choose Jurisdiction to start the GEO Codes by Address Data (tctax6105m000) session.
- Enter your company, business partners, and product-related
data in the tax provider.
- Define the valid product categories in the Product Category (tctax6101m000) session. The product categories that you define must
match the product categories defined in the tax provider.
- Enter the matrix of item groups, items, contract types,
service types, and ledger account numbers by product category, in the Product Category Tax Matrix (tctax6102m000) session.
- Enter the Tax Indicator field in the Contract Types (tsctm0105m000) session in Service. This indicates the type of tax processing
required for the contract type. This information is required because services
and rentals can be taxed differently.
Step 3. Adjusting the tax-provider interface setupAfter you have implemented the tax-provider interface,
consider to make the following adjustments: - Simplify the
tax-code structure.
- Use separate tax
codes for financial transactions.
- Create separate
service contracts for each customer location.
Simplify the tax-code structure If you have already used LN without a tax
provider, consider to perform a reevaluation of your current tax structure in Financials. The tax provider
does not require the complex tax handling implemented in LN for non-tax-provider
users. If you use a tax provider, LN uses the tax codes
to determine the ledger accounts to which the various amounts are posted. LN sets all tax codes
to singular tax during implementation of the tax-provider interface. The tax
provider determines the tax rates and the jurisdictions. Use separate tax codes for financial transactions You must enter the tax
amounts of financial transactions manually in the tax provider prior to filing
your quarterly reports. This is because the tax amounts of financial
transactions are not written to the tax-provider tax register. Use the Tax Provider Calculation Utility (tctax6212m000) session to enter these tax
amounts. You can define separate tax codes for financial transactions to
facilitate tracking of the tax amounts of financial transactions. Create separate service contracts for each customer location LN uses the location of the
covered installations as the delivery address for service contracts. For
correct tax calculations, you must maintain separate contracts for each
customer location. | |