Taxation Maintenance

Taxation items are used to define what percentage of an invoice amount must be paid as tax to the local, state, and/or federal government.

Taxation is applied at the time an invoice is generated and is based on the country that owns the invoice, which in turn is determined by the billing company record. Therefore, one or more taxation items must be configured in the system based on the country to which each billing company within your organisation belongs.

Depending on the country, a single tax may apply to invoices issued by an agency to its customers or there may be multiple taxes that apply, each with different tax rates.

Each tax that is applicable within each country within which the agency issues invoices must be configured as a taxation item within the Billing system.

A taxation item defines one or more tax rates, with each tax rate having a validity start and end date that define the period for which that rate of tax is valid. This allows multiple tax rates to be configured for each applicable tax. The system applies the appropriate rate based on the validity dates.

The validity end date of a tax rate can be unspecified if the tax rate is to remain valid indefinitely. However, only one tax rate can be valid at any given time for a given tax item and therefore, the validity dates of each tax rate for a tax item cannot overlap.

When a taxation item record is created it is, by default, flagged as enabled. If necessary, the record can be flagged as disabled instead to prevent it from being applied until the appropriate time. This is useful if you want create a number of taxation items in advance before you are able to confirm the tax rates and/or validity rates.

A taxation item can also define an import code and export code which allows the taxation item to be imported from and exported to external systems if integration with a third-party system is required.

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