Setting up Tax Details (TXD) - Tax

  1. Click the Tax tab in the Tax Details (TXD) dialog.
  2. Specify this information:
    Rate

    The percentage tax rate to be used to generate the tax amount in Ledger Entry (LEN), and in calculating the tax portion of any settlement discount value. You can enter a percentage tax rate in the range 0 to 99.99999.

    You should enter the true percentage, because in Journal Types (JNT), you determine whether the tax calculation is based on the gross or net of tax amount.

    Rounding Method

    This option allows you to define how the calculated tax amount is rounded for this tax type. If your tax accounting often results in differences due to rounding over many transactions, you may want to consider the implications of changing this option. For example, this enables an appropriate rounding of 'Consumption Tax' in Japan, where the tax rounding rules can be defined differently for each company.

    • Round To Nearest - the default rounding method. The tax is rounded to the nearest currency subunit (for which the number of decimal places is defined in Currency Codes (CNC), using the Decimals Allowed option). Any partial amount half way between these subunits is rounded up to the next subunit. Any partial amount less than half way between subunits is rounded down. For example, if Decimals Allowed is set to zero for the currency, 6.6 is rounded up to 7; 6.5 is also rounded up to 7; but 6.4 is rounded down to 6.
    • Round Up - the tax is rounded up to the next whole subunit for the currency. For example, if Decimals Allowed is set to two for the currency, 6.003 is rounded to 6.01, but 6.000 remains as 6.00.
    • Truncate To Defined Unit - the tax is rounded down to the nearest rounding unit (such as hundred, ten, unit, one decimal place, and so on) that must be defined in the Rounding Unit option below. This option ignores the Decimals Allowed for the currency.
    Rounding Unit

    This option is only available if you specify Truncate To Defined Unit for the Rounding Method option, above. This is the defined unit to which you want tax to be rounded down. For example, if you specify Hundred, and the calculated tax is 490, the tax amount after truncation is 400.

    Input Account Code 1

    An account code to which the tax portion of a transaction created in Ledger Entry (LEN) should be posted, for input tax. The tax portion of a generated settlement discount amount on Creditor accounts, and credit balance Client accounts, are written to this account. Enter ********** ten asterisks to post back to the base account referenced on the transaction in Ledger Entry (LEN).

    Input Account Code 1 %

    The percentage of the total tax amount calculated that is to be posted to Input Tax Account Code 1.

    Note: This field is only relevant when you want to split the tax portion of a transaction, as required by some countries.
    Input Account Code 2

    The account code to which the remaining input tax should be posted, if the percentage is not zero. Enter ********** ten asterisks to post back to the base account referenced on the transaction in Ledger Entry (LEN).

    Output Account Code 1

    An account code to which the tax portion of a transaction created in Ledger Entry (LEN) should be posted, for output tax. The tax portion of a generated settlement discount amount on Debtor accounts, and debit balance Client accounts, are written to this account. Enter ********** ten asterisks to post back to the base account.

    Output Account Code 1 %

    The percentage of the tax amount calculated that is to be posted to Tax Account Code 1.

    Note: This field is only relevant when you wish to split the tax portion of a transaction as required by some countries.
    Output Account Code 2

    The account code to which the remaining tax should be posted, if the percentage is not zero. Enter ********** ten asterisks to post back to the base account.

  3. Save your changes.
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