Specifying tax base value formulas

For tax categories for which the tax amounts are not based on the net purchase order amounts or the net purchase invoice amounts, you can specify the algorithm used to determine the tax base amount. For example, if the tax is based on a percentage of the net amount, you must specify the tax base value formula.

To specify a tax base value formula

To specify the tax base value formula, use the following sequence of sessions:

  1. Tax Base Value Variables (tctax0110m000)

    Specify the variable for the tax base value formula. You can only use alphabetic codes for the variable, for example, ABC. In the description field, indicate the type of work or services for which you specify the formula.

    The Tax Base Value Type can only be Goods Amount. Therefore, you can specify and use a single variable for all the tax base value formulas that you must specify. However, if you must specify multiple formulas, for easier reference you can specify a number of variables and in the description field, indicate their use.

  2. Tax Base Value Formulas (tctax0111m000)

    Specify the tax base value formula. You can use numbers and the mathematic operators +, -, *, and /.

    To test the formula, select the formula and, on the appropriate menu, click Simulate Formula Calculations. The Simulate Formula Calculations (tctax0211m000) session starts.

  3. Simulate Formula Calculations (tctax0211m000)
    Test the result of the formula. Click Fill Variables to display the dialog box in which you can specify values for each variable of the formula in turn. If you click Process, LN displays the formula with these values and the calculated tax base amount.
To link the tax base value formula to a tax code

In the Tax Code by Country (tcmcs0136s000) session, select the tax base formula in the Tax Base Value Formula field.

Note

If you use tax categories, tax codes of the same tax category within one country must have the same tax base value formula.

Example

Example of tax base value formula

For example, for social contributions that must be withheld over 80 percent of the invoice amount, you can specify:

  • Tax base value variable: SERV
  • Tax base value variable description: Services (Low)
  • Tax base value formula: SRL
  • Description: Social Contribution (Low)
  • Tax base value formula: 0,80 * SERV

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