Tax Parameters (tctax0100m000)

Use this session to define the parameters that control how your company registers and reports tax amounts.

Tax determination method

In the Search Sequence Tax Libraries area, you must select these details:

  • Tax Exempt Level

    The method you use to set up tax exemptions. For details, refer to Tax exemption setup methods.

  • Search order

    The order in which the application uses various methods to determine the tax code and the tax country of taxable transactions. For details, refer to Search Order Tax Defaults.

    In the Search Sequence 1 field, select the method that applies to your transactions. If destination sales tax applies to most transactions, select Destination Sales Tax. If you model tax exceptions or exemptions, select the corresponding option. In all other situations, select Standard.

    If the order origin is Purchase and you use an Exemptions search order, the application first checks whether you defined an exemption for the warehouse.

Note

You can only select Destination Sales Tax if the Destination Sales Tax Applicable check box is selected in the COM Parameters (tccom0000s000) session.

Tax conditions

In the Ignore as Tax Condition area, you can select a number of criteria to be ignored when the application determines the tax code and tax country.

You can select these criteria:

  • The delivery terms.
  • The Department. The country of the department's address is not considered to determine the tax code and tax country.
  • The item on the order. If you have linked a tax code to the item, the application uses the item's tax code provided that tax code details exist for the tax code in the determined tax country.

 

Introduction Date

The date and time when the parameters become effective. The parameters are valid up to the effective date of a more recent parameter setting.

By default, this field displays the date and time when you changed and saved the parameter settings.

Description

The description of the parameter set. For example, you can indicate why you change the parameters.

Company

The financial company for which the parameters are valid.

Standard Tax Handling
Search Sequence Tax Libraries
Tax Exempt Level

The tax exemption setup method.

Select Extended if you want to specify tax exemption certificates and exempt reasons, and if you set up destination sales tax with or without a tax provider. For details, refer to Tax exemption setup methods.

Select Limited in these situations:

  • You indicate on the order headers whether the order is exempt from tax.
  • You do not want to set up tax exemptions.
Search Sequence 1

The first method the application uses to determine the tax code, the tax country, and the business partner's tax country of taxable transactions.

Select the method that applies to your transactions. For details, refer to Search Order Tax Defaults.

If the application does not find the tax details with this method, the application continues the search according to the method selected in the Search Sequence 2 field.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Unused concepts in Tax Handling.

Search Sequence 2

The second method the application uses to determine the tax code, the tax country, and the business partner's tax country of taxable transactions. For details, refer to Search Order Tax Defaults.

The application uses this method if no tax code and tax country are found with the method selected in the Search Sequence 1 field. If the application does not find the tax details with this method, the application continues the search according to the method selected in the Search Sequence 3 field.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Unused concepts in Tax Handling.

Search Sequence 3

The third method the application uses to determine the tax code, the tax country, and the business partner's tax country of taxable transactions. For more information, refer to Search Order Tax Defaults.

The application uses this method if no tax code and tax country are found with the method selected in the Search Sequence 2 field. If the application does not find the tax details according to this method, the application continues the search according to the method selected in the Search Sequence 4 field.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Unused concepts in Tax Handling.

Search Sequence 4

The fourth method the application uses to determine the tax code, the tax country, and the business partner's tax country of taxable transactions. For more information, refer to Search Order Tax Defaults.

The application uses this method if no tax code and tax country are found with the method selected in the Search Sequence 3 field. If the application does not find the tax details according to this method, the application continues the search according to the method selected in the Search Sequence 5 field.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Unused concepts in Tax Handling.

Search Sequence 5

The fifth method the application uses to determine the tax code, the tax country, and the business partner's tax country of taxable transactions. For more information, refer to Search Order Tax Defaults.

The application uses this method if no tax code and tax country are found with the method selected in the Search Sequence 4 field. If the application does not find the tax details according to this method, the application continues the search according to the method selected in the Search Sequence 6 field. If the Search Sequence 6 field is not available, the application returns an error message.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Unused concepts in Tax Handling.

Search Sequence 6

The sixth method the application uses to determine the tax code, the tax country, and the business partner's tax country of taxable transactions. For more information, refer to Search Order Tax Defaults.

The sixth method is only available if you set up destination sales tax.

The application uses this method if no tax code and tax country are found with the method selected in the Search Sequence 5 field. If the application does not find the tax details according to this method, the application returns an error message.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Unused concepts in Tax Handling.

Options
Tax Declaration Currency

If required, specify Reporting Currency 1 or Reporting Currency 2.

Note

You can set this field to Reporting Currency 1 or Reporting Currency 2 only if the reporting currency is same as the local currency defined in the Companies (tcemm1170m000) session.

Default value

Local Currency

Use Tax Numbers of other Financial Companies

If this check box is selected, and the tax country of a transaction changes, the application can replace the tax number on the transaction. The application can replace your tax number on, for example, order acknowledgements and sales invoices with the tax number of the financial company in the new tax country.

If this check box is cleared, the application always retrieves your tax number from the financial company in the country of the sales office, purchase office, or service department of the order.

BP Tax Number for Purchase Transactions is Mandatory

If this check box is selected, the application registers always value added tax on purchase orders if the business partner's tax number is not available.

If this check box is cleared, the application searches the tax code setup data to derive the tax code and calculate the tax amount, even if the business partner's tax number is not yet available.

If you create a purchase order for a new business partner, you do not know the business partner's tax number until you receive the purchase invoice. To avoid tax registration for such purchase orders, you can clear this check box.

Allow Simplified Triangulation between Own Entities

If this check box is selected, the application uses the ICT ABC Transactions tax code for triangular trade transactions between enterprise units of your company.

If you select the Use Tax Numbers of other Financial Companies check box, you can select this check box.

In situations in which the simplified triangular trade procedure applies, your organization does not have to be registered for tax in the country of the customer.

You can define the ICT ABC Transactions tax code in the Tax Handling (tctax0138m000) session.

Defer Tax Declaration of Correction Invoices

If this check box is selected, the tax declaration of correction invoices is deferred. You can manually allow these deferred tax transactions to be declared. This is used when the tax authorities want to have the confirmation from the customer that the correction invoice reflects the business transaction.

Tax Number Webservice URI

The "internal" webservice location associated with the tax number.

Fiscal ID Webservice URI

The "internal" webservice location associated with the fiscal ID.

Update Direct Delivery Sales Order Tax

If this check box is selected, the application updates the tax data of a direct delivery sales order based on the tax data of the corresponding purchase order.

If you select this check box, if you change the tax data of the purchase order, the application automatically changes the tax data of a related sales invoice.

You can select this data:

  • Only for ABC Transactions
    For triangular trade transactions, the application updates the tax data of a direct delivery sales order.
  • Always
    If you change the tax data of the purchase order, the application automatically changes the tax data of a related sales invoice.
  • Never
    If you change the tax data of the purchase order, the application does not change the tax data of a related sales invoice.
  • Not Applicable
    If you change the tax data of the purchase order, the application does not check whether related sales invoices exist.

You can define the ICT ABC Transactions tax code in the Tax Handling (tctax0138m000) session.

Important!

This field only applies to transactions within the European Union.

Performance aspects

The setting of this field could affect system performance and database growth. For more information, refer to Update direct delivery sales order tax

Tax Rounding

Tax rounding

Default value

Not Applicable

Note
  • This parameter setting only applies to:

    • Internal Purchase invoices generated in the Generate Intercompany Trade Purchase Invoices (tfacp2295m000) session.
  • This parameter setting does not affect tax calculation on regular invoices in Accounts Payable and Accounts Receivable.
Aggregate Tax
Aggregate Tax Implemented

If this check box is selected, the aggregate tax is implemented.

Number of Layers

Specify the number of layers to be considered.

Tax Exception Modeling
Tax Exception Lookup Sequence
Lookup Sequence 1

Use this field to indicate the order in which the application must retrieve tax exceptions.

Lookup Sequence 2

Use this field to indicate the order in which the application must retrieve tax exceptions.

Lookup Sequence 3

Use this field to indicate the order in which the application must retrieve tax exceptions.

Ignore as Tax Condition
Delivery Terms

If this check box is selected, you cannot use the delivery terms as a criterion for tax exceptions in the Tax Exceptions by Country (tctax1100m000) and the Tax Exceptions by Country Set (tctax1101m000) sessions.

Department

If this check box is selected, you cannot use the department as a criterion for tax exceptions in the Tax Exceptions by Country (tctax1100m000) and the Tax Exceptions by Country Set (tctax1101m000) sessions.

Item

If this check box is selected, you cannot use the item as a criterion for tax exceptions in the Tax Exceptions by Country (tctax1100m000) and the Tax Exceptions by Country Set (tctax1101m000) sessions.

Options
Step Size for Tax Exceptions

The number by which the application increases the generated line numbers in the Tax Exceptions by Country (tctax1100m000) and the Tax Exceptions by Country Set (tctax1101m000) sessions.

Company Set for Tax Exceptions

The financial company set for which the tax exceptions are applicable in the Tax Exceptions by Country (tctax1100m000) and the Tax Exceptions by Country Set (tctax1101m000)) sessions.