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.

In the Delivery Tax Information tab you enter info such as tax book reference and the customer's tax regime. In the Supply Country sub tab you enter tax liabilities, and tax free tax codes if the tax liability is exempted, for each of your company's supplying countries. Tax regime and tax liability are mandatory for all customers in a company.

In the Document Tax Information tab you enter tax ID types and tax ID numbers to be quoted on documents.

The Taxes tab is applicable only for customers with Sales or Mixed tax regimes. Sales tax codes can be entered here which will be used in transactions when the particular customer is referred to.

The Tax Exempt Info  tab is used to define whether tax exemption exists for a specific delivery address. A tax exempt needs to be clarified by a certificate from the authorities and needs to be filed for, and issued by an authority. When registering a tax exempt for a Sales Tax tax regime you are required to enter a certification number and certificate jurisdiction. Specifying tax exempt info is not mandatory for customers using VAT and Mixed tax regimes.

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

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.

System Effects

If the customer's tax regime is VAT,  the VAT information defined in this tab is used in Instant Invoice, and also whenever invoices are created from other parts of IFS Applications, e.g., Customer Order, to decide whether or not VAT is to be charged when delivering to this address.

If the customer's tax regime is Sales Tax or Mixed,  the information defined in this tab is used in Instant Invoice, and also whenever invoices are created from other parts of IFS Applications, e.g., Customer Order, to automatically create tax lines based on the tax codes associated with the customer and delivery address specified on the invoice.

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 (the VAT 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.

Window

Customer

Related Window Descriptions

Customer

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. Select the tax regime for the customer. The Tax Regime field defaults to the tax regime of the company connected to the customer. However you can customize this value for the specific customer by selecting another value from the Tax Regime list. For example, if the company's default tax regime is set to Sales Tax, the tax regime still can be changed to Mixed at this level.
  3. If a Sales tax regime or Mixed tax regime  is used, specify tax codes in the Taxes sub tab by adding appropriate records to the table. You can associate multiple tax codes with the current address.
  4. In the Tax Withholding field, specify whether or not the customer is subject to tax withholding.
  5. In the Tax Rounding Method field, select the tax rounding method to be used for the customer.
  6. In the Tax Rounding Level field, specify the tax rounding level to be used.
  7. Save the information.

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.