Enter Customer Tax Information

Explanation

The Enter Customer Tax Information activity is used to set up tax rules for the relation between our company and the customer address. For each delivery address, specify the tax liability applicable to the relation between each one of your supplying countries and this specific address. You can also specify Supply Country '*' (asterisk), with the meaning 'any not specifically selected Supply Country'. I.e. the tax liability specified for Supply Country '*' will apply for all not specifically selected Supply Countries.

In the Delivery Tax Information tab you enter information such as tax book reference. It is also possible to enable tax withholding for the selected delivery address of the customer by selecting Tax Withhold in the field Tax Withholding.

In the Supply Country sub tab you enter tax liabilities, and tax free tax code if the tax liability is exempt, for each of your company's supplying countries. Tax liability is mandatory for all customers in a company.

In the Taxes tab, tax codes can be entered which will be used in transactions when the particular customer is referred to. This is typically used when tax is not defined for the sales object. Note! If tax codes are entered in this tab and tax code is also entered in the sales object, all tax codes will be applied on the transaction.

The Tax Exempt Info tab is used to define whether tax exemption exists for a specific delivery address. If a tax exempt needs to be clarified by a certificate from the authorities and needs to be filed for, enter that information here.

In the Tax Free Tax Codes tab, you enter a tax free tax code if the tax liability is exempt. For liability exempt, specify also tax free tax codes, by delivery type, in order to separate goods, services and tripartite trade in the tax reporting. You can also specify Delivery Type '*' (asterisk), with the meaning 'any not specifically selected Delivery Type'. I.e. the tax free tax code specified for Delivery Type '*' will be used for all not specifically selected Delivery Types but also if the delivery type is missing on the order/invoice line, e.g. not specified on the sales item. 

The IPD Tax Information sub tab should be set up if direct deliveries in the inter-site order functionality is made to this address.

In the Document Tax Information tab you enter Tax ID Types and Tax ID Numbers to be quoted on documents. For each document address, specify the customerīs tax ID number(s) to quote. Tax ID numbers can be specified for each document address by our company ID and Supply Country. If the same tax ID number should be quoted regardless of Supply Country, you can specify Supply Country '*' (asterisk) with the meaning 'any not specifically selected Supply Country'.

Prerequisites

This activity requires that you have entered the required values in the Customer/Invoice and Address tabs. You also must have defined the tax codes in the Tax Codes window in IFS/Accounting Rules and the tax liability information in the Tax Liability window of IFS/Enterprise. If you will reference a tax book, the tax book must be defined in the Tax Book window in IFS/Accounting Rules.

In IFS Enterprise/Company/Tax Control/General tab, you define how customer handle their taxes. If checkbox Object Level is selected, it is required to enter tax information on sales items (e.g. sales object, sales part, non-inventory sales part, package part, sales charge type and report code for projects). If checkbox Address Level is selected, it is required to enter tax information in window Customer, tab Address/Delivery Tax Information/Supply Country. If checkbox Transaction Level is selected, it is required to enter a tax code on transactions (e.g. customer orders, sales quotations and various types of customer invoices).

System Effects

Depending on the tax setup in this window, tax codes will be fetched accordingly to the transactions. Note! If tax code are entered in this window and also entered in the sales object, all tax codes will be applied on the transaction.

For example:

Let's say that customer ABC has two tax codes associated with the delivery address ID 1: AZST (Arizona State Tax 5%) and AZCT (Arizona City Tax 10%). If a customer invoice for $100 is manually created for ABC using the delivery address ID 1, two tax lines will be created automatically: tax line 1, AZST 5% = $5 ($100 x 0.5), and tax line 2, AZCT 10% = $10 ($100 x 0.10). The total tax amount on the Lines tab in the Customer Invoice or Instant Invoice window will be updated to $15.

If you specify a tax book or tax book structure for the customer, it will be used whenever you report tax transactions related to the customer.

If you select Tax Withhold in the field Tax Withholding in the Delivery Tax Information tab, it will be possible to connect income types and tax withholding codes for the selected delivery address of the customer.

Window

Customer

Related Window Descriptions

Customer, Customer Tax Withholding, Customer Tax Withholding/Customer Income Type, Customer Tax Withholding/Default Tax Withholding Codes

Procedure

First open the Customer window and select a customer. Then click the Address tab and select the address ID for which you want to enter tax information.

On the Address/Delivery Tax Information tab:

  1. In the Company field, enter the company identity for which the tax rules apply.
  2. In the Tax Withholding field, specify whether or not the customer is subject to tax withholding.
  3. In the Tax Rounding Method field, select the tax rounding method to be used for the customer.
  4. In the Tax Rounding Level field, specify the tax rounding level to be used.
  5. In the Supply Country sub tab, Supply Country is automatically filled depending on the address of your company. You can also enter other supply countries if needed. Tax Liability Tax is default. Specify tax codes in the Taxes sub tab or in the Tax Free Tax Codes sub tab, depending on your Tax Liability, by adding appropriate records to the table. You can associate multiple tax codes with the current address.
  6. Save the information.

To enter tax withholding basic data:

  1. On the Delivery Tax Information tab, select Tax Withhold in the field Tax Withholding.
  2. Right-click on the Delivery Tax Information tab and then click Customer Tax Withholding.
  3. Select a value in the field Withholding Base Amount. By default the withholding base amount will be Invoice Net Amount.
  4. If the customer is exempt from tax withholding, select the Tax Exempt check box. Also, enter the beginning and ending dates of the period during which the exemption is valid.
  5. Click the Customer Income Type tab.
  6. Create a new record.
  7. In the field Income Type, select the customer income type from the list of values. When you select the income type, Default Income Type check box will be automatically selected.
  8. Click save.
  9. Click the Default Tax Withholding Codes tab.
  10. Select tax code of tax type Tax Withhold in the field Tax Code.
  11. Select the income type in the field Income Type.
  12. Click save.

On the Address/Delivery Tax Information/Supply Country sub tab:

  1. In the Supply Country field, select a supply country from the List of Values.
  2. Enter the tax liability code that indicates the nature of the customer's tax liability for deliveries from the supply country to this address. You can use the List of Values to select a valid tax liability code.
  3. If applicable, enter a tax book or tax book structure to connect to the customer. You can use the List of Values to select a valid tax book or structure.
  4. If the tax liability is set to exempt, you also need to enter one or more tax free tax codes. In the Tax Free Tax Codes sub tab, create a new record and enter delivery type and tax free tax code. Note that the value asterisk (*) can be used for delivery type, which connotes 'for all not specifically defined delivery types'.
  5. If tax liability exempt was specified, enter the tax exempt details in the Tax Exempt Info sub tab.
  6. Save the information.

On the Address/Delivery Tax Information/IPD Tax Information sub tab:

  1. The IPD Tax Information tab should be set up if direct deliveries in the inter-site order functionality is made to this customer address. In the IPD Supply Companies section, create a new record and enter the supply company, the supply country, the delivery address country, the tax liability and the appropriate tax id type and number.
  2. For IPD Tax Information where the tax liability is set to exempt, you also need to enter one or more tax free tax codes. In the IPD Tax Free Tax Codes section, create a new record and enter delivery type and tax free tax code. Note that the value asterisk (*) can be used for delivery type, which connotes 'for all not specifically defined delivery types'.
  3. Save the information.

On the Address/Document Tax Information tab:

  1. In the Company field, enter the company identity for which the tax rules apply.
  2. In the Supply Country field, select a supply country from the dropdown list. Note that the value asterisk (*) can be used for supply country, which connotes 'for all not specifically defined supply countries'.
  3. In the Tax ID Type and Tax ID Number fields, enter the customer's tax id type and number to be quoted on documents.
  4. Save the information.