What are Selection Criteria?

Different rates of withholding tax may apply to payments made or received for particular types of goods, or service, or other types of transaction. In this case, you may need to apply different tax calculation rules to selected groups of transactions for an account, and you need a method of identifying the groups of transactions.

Selection criteria are used to group the transactions on an account. You can define up to five selection criteria to identify the analysis and group the taxable transactions.

A selection criteria identifies a field of information that exists on either the account or transactions which are used to select and group the transactions. The fields you can use as selection criteria fields are predefined within the Withholding Tax module and include the account analysis codes and transaction analysis codes.

The calculation rules that define the withholding tax rates can be entered against a valid combination of selection criteria values. If you select more than one selection criteria for a calculation rule, a transaction must meet all of these criteria for the tax to apply.

For Example

A type of corporation withholding tax might apply to payments to suppliers. Different rates of tax might apply according to the type of class of service being purchased, as illustrated in the following table:


Class of Goods/Services	Purchase Value From	Purchase Value To	Fixed Tax Amount	Percentage Tax
Professional Services	0	2000	-	10
	2000	4000	200	14
	4000	8000	480	18
	8000	Onwards	1200	22
Rent	1200	Onwards		6

The class of rent or service is identified by a transaction analysis code called PG Class with a value of either Rent or Service. Therefore, a selection criteria of PG Class could be identified for this withholding tax code and calculation rules could be defined. One rule defining the professional services tax details for transactions referencing the service, and the other defining the rent tax details for transactions referencing the rent.