Setting up Tax

Depending on your business needs, you might also need to set up the Tax application. Requisitions uses tax information from the Tax application, which uses tax codes and rates to calculate tax. This procedure outlines the information you must define in Tax if you are going to set it up.

The information you define includes setting up tax codes. Items can be flagged as taxable on a requisition. If an item is flagged as taxable, you can optionally specify a tax code. The tax code is validated against the tax code field in the Tax application. Taxes are calculated on the purchase order and the invoice. Tax is not included in the requisition total.

Set up Tax

Access Company (TX00.1) and define the tax company. Decide whether to assign general ledger accounts at the company or at the tax code level. If you assign your accounts at the company level, your taxes are summarized, not broken down into individual posting accounts. If you assign your accounts at the tax code level, you will see detailed information on your taxes (such as invoiced and accrued tax).
Access Tax Code Master (TX01.1) and define your tax codes.
Access Tax Rate (TX03.1) and assign tax rates to your tax codes. After your application has tax rates assigned to its tax codes, it can calculate your taxes automatically.
If you have a tax code set up as a tax table code and you want to assign more than one tax to a transaction, access Tax Tables (TX01.2) and define a tax table. Assign an effective date for the table and decide what taxable effect each tax code will have on the taxable amount for the next tax code in the table.

For more information, see the Tax User Guide.