E-Business Tax "Tax Calculation/Determination ORDER on taxable transaction"
- Determine Applicable Tax Regimes & Taxes
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Determine Applicable Tax Regimes & Taxes
•
Determine Regimes & Taxes associated with
Country
- Determine place of supply & Tax
Jurisdiction
•
Place of supply (Bill from, Bill to, Ship from,
Ship to)
•
Identify Tax jurisdiction on transaction
- Determine Tax Applicability
•
Derive applicability from tax rule conditions
•
consider default values unless a tax rule exists
with value "Applicable"
- Determine Tax Registration
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Consider the determine tax registration tax rule
for the first tax.
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If Rule not found, consider default values of
tax registration and identifies one of these parties to derive tax
registration.
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Bill From
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Bill To
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Ship From
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Ship To
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Use Bill to if Ship to is not available.
- Determine Tax Status
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Consider the Determine Tax Status tax rule of
the first tax.
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If no rule applies, then use the default tax
status of the tax.
- Determine Tax Rate
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Consider the Determine Tax Rate tax rule of the
first tax status.
•
If the rule conditions do not apply, then use
the default tax rate of the tax status.
•
Look for an exception rate specific to the
inventory item or fiscal classification of the item. If an exception rate is
found, then the rate derived in previous step is either replaced or modified,
depending on the type of exception.
•
For each tax, if a customer tax exemption
applies to an Order-to-Cash transaction, then update the tax rate.
- Determine Taxable Basis
This process determines the taxable
base amount or quantity for each tax.
•
Consider the Determine Taxable Basis tax rule.
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If the rule conditions do not apply, then use
the default taxable basis tax formula.
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Consider the tax inclusive settings of the
applicable taxes to display the taxable basis amount and calculated tax amount
for each tax. If specified, E-Business Tax uses the party tax profile of each
tax registration party to determine the nature of tax inclusive handling.
(Means, if business wants to use non-tax inclusive for few parties so that can
be achieved by this option.)
•
The standard taxable basis formulas are Taxable Basis = Line Amount and, for
quantity-based rates, Taxable Basis =
Quantity.
- Calculate Taxes
This process calculates the tax
amount on the transaction. In most cases, the tax amount is computed by
applying the derived tax rate to the derived taxable basis.
•
Use the tax calculation tax formula derived from
the tax rule, if there is one.
•
If no rule is defined, or the rule conditions do
not apply, then use the default tax calculation tax formula that is set for the
tax.
•
Perform rounding operations on the calculated
tax amount.
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