Defining default tax codes

To define the default tax codes for the various types of transactions:

1. Set up the tax codes as described in Setting up tax registration. You must define a tax code for each tax rate in each country.

2. In the Tax Handling (tctax0138m000) session, specify the default tax codes in each country. If a tax code applies to a specific item, you must specify the item. LN applies the tax codes with an empty Item field to all the items for which you do not define specific tax codes.

   For domestic tax, the search path for the tax code includes the tax codes of the item data. For more information, refer to Item tax codes for domestic tax.

You can define default tax codes for the following types of tax:

• Domestic VAT
• Import VAT
• Export VAT
• Own goods movement
• Triangular trade

For domestic tax, you can also link default tax codes to items or item groups in the following sessions:

• Items - Sales (tdisa0501m000).
• Items - Purchase (tdipu0101m000).
• Item - Sales Defaults (tdisa0102s000).
• Items - Purchase Defaults (tdipu0102m000).

You can define the following default EU tax codes:

• Intracommunautair transactions (ICT Sales VAT)
• Intracommunautair transactions (ICT Purchase VAT)
• Freight ICT Sales
• Freight ICT Purchase

LN uses the VAT codes for intra-EU transactions if the following is true:

• The business partners involved are legal persons, in other words, the business partners have a tax number in the country concerned.
• The transactions are posted to financial companies that reside in EU countries.

The tax rates for intra-EU transactions apply to the following transaction types:

• Sales transactions and purchase transactions between your company and external business partners.
• Sales transactions and purchase transactions between affiliated-company business partners.