Adding Tax Groups

You create sales and purchases tax groups to which you assign tax authorities.

  • Tax reporting currency allows clients to report taxes in a currency that is different than the customer/vendor currency or the functional currency. Some countries, such as Singapore, require that when invoicing a source currency (for example, USD), the tax amount and the exchange rate used be shown on the invoice in the currency of the country (for example, Singapore). Since taxes are remitted to the taxing authority in the reporting currency, tax tracking will reflect the information for this reporting currency. General Ledger entries will be in the reporting currency for remitting and audit purposes.
  • When you assign a tax authority to a tax group, and then change the Report Tax on Retainage Document option in the Tax Authorities screen for that tax authority, you must also update the Tax Group to reflect this change and to avoid data integrity problems.
  • Before you set up tax groups, you need to add your tax authorities, tax classes, and tax rates.
  • If an Authority within the tax group uses surtax, both the Authority and Surtax on Authority must have the Report Tax on Retainage Document option in the Tax Authorities screen set to the same selection (that is, both Authorities must be set to "At Time of Original Document," or to "At Time of Retainage Document"). For more information, see Tax Authorities Screen.
  • If an Authority within the tax group is taxable by another Authority, all Authorities assigned to the Tax Group must have the Report Tax on Retainage option set to the same selection (that is, all Authorities must be set to "At Time of Original Document," or to "At Time of Retainage Document"). For more information, see Tax Authorities Screen.

To add or edit a tax group:

  1. Open Common Services > Tax Services > Tax Groups.
  2. Enter a code to add a new tax group, or use the Finder to select an existing group.
  3. Select the transaction type.
    • If you select Sales, the sales tax table is displayed.
    • If you select Purchases, the purchases tax table is displayed.
  4. Choose a tax reporting currency (if this is a multicurrency database).
  5. Choose a tax reporting rate type (if this is a multicurrency database).
  6. Choose a tax calculation method.
  7. In the table, use the Finder to select an authority, and then:
    1. If the authority is taxable, double-click the Taxable field to change the entry to Yes.
    2. If the authority uses a surtax, double-click the Surtax field to change the entry to Yes.
    3. Use the Finder for the Surtax On Authority field to select the surtax authority.
  8. Click Add to save a new tax group (or click Save to save changes to an existing group).
  • To print a list of the tax groups you have added or edited, click Print on the File menu. For more information, see Tax Groups Report.
  • After you finish setting up Tax Services, use the Data Integrity feature in Administrative Services to make sure your data is sound, then make a backup copy of it.
  • Enter tax information in each subledger.