Tax Lookup Hierarchy for EU Transactions
Required: Enable Tax Lookup on Sales Transactions = T
Scenario#1. SUBSIDIARY NEXUSIS THE SAME WITH SHIPPING ADDRESS
*This scenario is considered adomestic sale
- Tax Item on the customer record
- Tax Schedule in the Item record for the Subsidiary Nexus
- Default Tax Code in the Subsidiary Nexus
Example:
Customer A Subsidiary = UK
Shipping Address is France, but UK Subsidiary includes France and UKNexus
Tax Lookup will be asfollows:
- Tax Item on Customer A's record
- Tax Schedule in the Item record for France Subsidiary
- Default Tax Code of France Subsidiary (Setup > Accounting > Setup Taxes > France > Default Code)
Scenario#2. SUBSIDIARY NEXUSIS NOT THE SAME WITH SHIPPING ADDRESS BUT THEY BELONG TO THE SAME ECONOMICUNION AND CUSTOMER HAS A VALID TAX REGISTRATION NUMBER
*This scenario is considered anIntra-Community Sale transaction
- Tax Item on the customer record
- EC Code of Nexus
- Default Tax Code of Nexus
Note for EC Code:
- Tax Code record = EC Code checkbox must be True
- There should be a value on the Notional Rate Derived From dropdown for the system to pull up the EC Code on transactions
EC Code – Check this box if this tax code is used fortransactions with customers or vendors in the European Union.
Notional RateDerived From – If this is an EC taxcode, select the code and rate this new tax code is based on.
Example:
Customer A = UK Subsidiary, with valid Tax Registration Number ofFrance
Shipping Address = France but France nexus is not part of UKSubsidiary
Tax Lookup will be asfollows:
- Tax Item on Customer A's record
- UK Tax Code with the EC Checkbox marked to True
- Default Tax code of UK (Setup > Accounting > Setup Taxes > UK > Default Code)
Scenario#3. SUBSIDIARY NEXUSIS NOT THE SAME WITH SHIPPING ADDRESS BUT THEY BELONG TO THE SAME ECONOMICUNION AND CUSTOMER HAS NO VALID TAX REGISTRATION NUMBER
*This will be considered as adomestic sale
- Tax Item on the customer record
- Tax Schedule in the Item record for the Subsidiary Nexus
- Default Tax Code in the Subsidiary Nexus
Example:
Customer A = UK Subsidiary, No Valid Tax Registration Number
Shipping Address = France but France Nexus is not part of UKSubsidiary
Tax Lookup will be asfollows:
- Tax Item on the customer record
- Tax Schedule in the Item Record for UK Subsidiary
- Default Tax Code of UK Subsidiary in the Setup Taxes Page (Setup > Accounting > Setup Taxes > UK > Default Code)
Scenario#4: SUBSIDIARY NEXUSIS NOT THE SAME WITH THE SHIPPING ADDRESS AND THEY DON'T BELONG TO THE SAMEECONOMIC UNION
*This is considered as Export sales
- Tax Item on the customer record
- Tax Code for Exports
- Default Tax Code
Example:
Customer A = UK Subsidiary
Shipping Address is Philippines and Philippines Nexus is not part ofUK Subsidiary nor is a member of EU Countries
Tax Lookup will be asfollows:
- Tax Item on the customer record
- Tax Code for Exports for UK (Setup > Accounting > Setup Taxes > UK > Tax Code for Exports)
- Default Tax Code for UK (Setup > Accounting > Setup Taxes > UK > Default Code)
Note:
Only Tax Codes with the Export box checked will be available on theTax Code for Exports dropdown
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