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Taxes

Form ID: (TX205000)

You can use this form to define all the taxes related to your business. You can configure taxes of the following major types: Sales, Use, VAT, and Withholding. Each tax is reported to a specific tax agency and is paid to or claimed from the agency.

The definition of the tax includes such settings as the following:

  • The tax rate used to calculate the tax amount
  • The method of tax amount calculation
  • The date when the tax becomes effective or after which the tax is not valid
  • The general ledger accounts to which the calculated tax amounts should be posted
If the External Tax Calculation Integration feature is enabled on the Enable/Disable Features (CS100000) form and integration with Avalara is set up in the system, during the processing of a use tax in AP documents, Avalara integration creates a new use tax on the current form. For details, see Setup of Online Integration with Avalara AvaTax.

On the tabs on this form, you can view tax categories and tax zones that include the tax, and easily exclude a particular tax from tax categories or zones.

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Back to TopForm Toolbar

The form toolbar includes only standard buttons. For the list of standard buttons, see Form Toolbar and More Menu.

Back to TopTax Settings Tab

On this tab, you can select a tax to view its details, or you can create a new tax.

Element Description
Tax ID The unique identifier of the tax. You can use an alphanumeric string of up to 60 characters.
If Avalara integration is used, when AP documents are processed, the use taxes that are automatically created in Acumatica ERP have the USE suffix in their tax ID and the Use option selected in the Tax Type box.
Description A detailed description of the tax. You can use an alphanumeric string of up to 30 characters.
Tax Type The type of tax, which can be Sales, Use, VAT, or Withholding.
If Avalara integration is used, when AP documents are processed, the use taxes that are automatically created in Acumatica ERP have the USE suffix in their tax ID and the Use option selected in this box.
Partially Deductible VAT A check box that indicates (if selected) that this is a partially deductible value-added tax. You configure this type of tax if your company is allowed to deduct some part of the tax paid to a vendor from your own VAT liability to the government.
If you select this check box for a tax, you can assign this tax to only the Input group type. You select an input group in the Reporting Group column on the Tax Schedule tab.
This check box is cleared by default and unavailable if the Direct-Entry Tax check box is selected for the tax.
This check box is available only if the VAT Reporting feature is enabled on the Enable/Disable Features (CS100000) form.
For details, see Value-Added Taxes: Partially Deductible VAT.
Reverse VAT A check box that indicates (if selected) that this is a reverse VAT. A reverse VAT is a type of VAT used in some countries of the European Union (EU). When this type of tax is applied to a company that supplies goods or services to other EU countries, the liability of the reporting VAT is reversed and goes to the customer rather than to the vendor.
This check box is cleared by default and unavailable if the Direct-Entry Tax check box is selected for the tax.
This check box is available only if the VAT Reporting feature is enabled on the Enable/Disable Features (CS100000) form.
For details, see Value-Added Taxes: Reverse VAT.
Statistical VAT A check box that indicates (if selected) that the VAT on documents will be calculated only for statistical purposes—that is, will be reported only but not actually paid.
This check box is available only if the VAT Reporting feature is enabled on the Enable/Disable Features (CS100000) form.
For details, see Value-Added Taxes: Statistical VAT.
Pending VAT A check box that indicates (if selected) that the tax that should be calculated in documents, but should not be recorded to the tax report until the tax invoice is received. Later the VAT of the pending type can be converted into a general VAT on the Recognize Input VAT (TX503500) or Recognize Output VAT (TX503000) form.
This check box is cleared by default; if the Direct-Entry Tax check box is selected for the tax, you can select the current check box. Direct-entry taxes that have the Pending VAT check box selected are further processed on the Bills and Adjustments (AP301000), Checks and Payments (AP302000), Recognize Input VAT (TX503500), and Recognize Output VAT (TX503000) forms as regular pending VATs.
This check box is available only if the VAT Reporting feature is enabled on the Enable/Disable Features (CS100000) form.
For details, see Value-Added Taxes: Pending VAT.
Direct-Entry Tax A check box that indicates (if selected) that this tax can be entered directly for a document on the Tax Bills and Adjustments (TX303000), Bills and Adjustments (AP301000), Cash Purchases (AP304000), and Landed Costs (PO303000) forms.
For a direct-entry tax, the following rules are applied:
  • A direct-entry tax cannot be included in the same tax category with non-direct-entry taxes if the Exclude Listed Taxes check box is cleared for this tax category.
  • Multiple direct-entry taxes cannot be included in the same tax category if the tax category is assigned to the same tax zone.
If you select this check box for a tax, the system applies the following settings, which are not editable:
  • Calculation Rule: Inclusive Line-Level
  • Cash Discount: Does Not Affect Taxable Amount
  • Exclude from Tax-on-Tax Calculation: Selected
With this check box selected, the state and behavior of the following check boxes are changed:For details, see Direct Tax Payment: General Information.
Include in VAT Exempt Total A check box that indicates (if selected) that this value-added tax has a zero rate and is used to calculate a document subtotal that is actually exempt from VAT. The calculated amount will be displayed in the VAT Exempt Total box in the documents (such as bills and invoices).
This check box is available only if the VAT Reporting feature is enabled on the Enable/Disable Features (CS100000) form.
Include in Taxable Total A check box that indicates (if selected) that the VAT taxable amount should appear in the VAT Taxable Total box in the documents (such as bills and invoices).
If a document contains multiple transactions (lines) with different taxes applied on each line and each of the applied taxes has this check box selected, the taxable amount calculated for each line of the document will be added to the VAT Taxable Total box of the document.
Clear this check box if you do not want the system to insert the taxable amount calculated based on this tax into the VAT Taxable Total box of the documents.
This check box is available only if the VAT Reporting feature is enabled on the Enable/Disable Features (CS100000) form.
Calculation Rule The method of calculating the tax amount.
One of the following options can be selected:
  • Inclusive Line-Level: The tax amount is included in item amounts and should be extracted. For withholding taxes (those for which Withholding is selected in the Tax Type box on the current form), this option is selected by default.
  • Exclusive Line-Level: This tax is a first-level tax calculated on item amounts.
  • Compound Line-Level: This tax is a second-level tax calculated on item amounts and the amounts of the first-level taxes.
  • Inclusive Document-Level: This is a first-level tax; also, it is included in the document amount and should be extracted. This tax is calculated on the sum of line amounts of all the items with the same tax applicable.
  • Exclusive Document-Level: This tax is a first-level tax calculated on the document amount, not on a per-line basis. This tax is calculated on the sum of line amounts of all the items with the same tax applicable.
  • Compound Document-Level: This tax is a second-level tax calculated on the document amount and the amount of the first-level tax.
Cash Discount The method of calculating the tax base amount if a cash discount is applied.
One of the following options can be selected:
  • Reduces Taxable Amount: The taxable amount is decreased by the cash discount. The tax amount is calculated on the document total amount minus the cash discount.
  • Does Not Affect Taxable Amount (default option): Taxes are calculated on the document total whether the cash discount is applicable or not.
  • Reduces Taxable Amount on Early Payment: The system will adjust the taxable amount (by using the credit memo) if the final payment has been received within the cash discount period (that is, before the Cash Discount Date specified in the invoice). For details, see VAT for Early Payments: General Information.
    		•  This option is available for a VAT type of tax only (that is, a tax for which the VAT option is selected in the Tax Type box).
Exclude from Tax-on-Tax Calculation A check box that indicates (if selected) that this is a first-level tax. With this check box selected, for calculating the second-level tax amount in a document, the system uses the same tax base (taxable amount) that was used for calculating the first-level tax amount. That is, the system excludes the first-level tax amount from the tax base used for calculating the second-level tax amount.
If this check box is cleared, the system uses the first-level taxable amount plus the first-level tax amount as the tax base for calculating the second-level tax amount.
For use taxes (that is, taxes for which Use is selected in the Tax Type box of the current form), this check box is selected by default.
For details, see Use Taxes: General Information.
Tax Agency ID The name of the tax agency to receive the tax. In Acumatica ERP, tax agencies (as well other taxing authorities) are defined as vendors. Select a vendor account from the list of accounts that are tax agencies, or leave the box blank.
The list of vendors available for selection may be limited based on the role or roles assigned to the user account to which you are signed in if the Customer and Vendor Visibility Restriction feature is enabled on the Enable/Disable Features (CS100000) form. In this case, the Restrict Visibility To box appears on the Financial tab of the Vendors (AP303000) form. With the feature enabled, a vendor is available for selection if one of the following is true:
  • The Restrict Visibility To box is empty for the vendor—that is, the vendor’s visibility is not restricted.
  • A branch, company, or a company group is specified in the Restrict Visibility To box for the vendor, and your user account has the role specified in the Access Role box of the Configuration Settings section of one of the following: the Branch Details tab of the Branches (CS102000) form for the selected branch, or the Company Details tab of the Companies (CS101500) form for the selected company or a company within the company group.
Not Valid After The date after which the tax is not effective.

Back to TopTax Schedule Tab

This tab contains information about the schedule of the tax, as well as its rate, minimum and maximum taxable amount, and reporting group.

The table toolbar includes only standard buttons. For the list of standard buttons, see Table Toolbar.

Column Description
Start Date The date when the tax at the rate in the current row becomes effective.
If the rate for the tax changes in the future, add a row to this table and specify a start date for a new rate.
Tax Rate The tax rate (%) that is used to calculate the tax amount.
Deductible Tax Rate The percentage of the input tax that can be claimed, which reduces the output tax.
This column appears only if the Partially Deductible VAT check box is selected for the tax.
Min. Taxable Amount The minimum taxable amount for which this rate is applicable. No minimum will be set if you type 0.
Max. Taxable Amount The maximum taxable amount for which this rate applies. No maximum will be set if you type 0. If both minimum and maximum amounts (greater than 0) are set, the maximum amount should be greater than the minimum amount.
Reporting Group A reporting group (which can be input or output) defined for the tax with the tax rate specified in the selected row. Reporting groups are defined for the tax agency on the Reporting Groups tab of the Reporting Settings (TX205100) form. If no tax agency is specified for the tax on the current form, a default input reporting group or default output reporting group should be specified.
You can select only an input reporting group (with the Input group type) for a partially deductible VAT (a tax that has the Partially Deductible VAT check box selected on the Tax Settings tab). You can select only an output reporting group (with the Output group type) for a withholding tax (a tax that has Withholding selected in the Tax Type box on the Tax Settings tab).
Group Type The type of the reporting group selected in the Reporting Group box. For details, see Tax Report.

Back to TopCategories Tab

This tab displays the tax categories in which the tax is included.

The table toolbar includes only standard buttons. For the list of standard buttons, see Table Toolbar.

Column Description
Tax Category ID The tax category in which the tax is included.
Exclude Listed Taxes A check box that indicates (if selected) that this tax should be excluded from calculation when used with the specified category.
Description The detailed description of the tax category.

Back to TopZones Tab

This tab has a table showing the tax zones that include the tax.

The table toolbar includes only standard buttons. For the list of standard buttons, see Table Toolbar.

Column Description
Tax Zone ID A tax zone that includes the tax.
Default Tax Category The default tax category assigned to the tax zone.
Description The detailed description of the tax zone.

Back to TopGL Accounts Tab

You use this tab to specify the accounts to be used for this tax.

Element Description
Tax Payable Account The liability account that accumulates the tax amounts to be paid to a tax agency for the tax reporting period. By default, the account is associated with the tax agency but can be overwritten.
Tax Payable Subaccount The corresponding tax payable subaccount.
This box is available only if the Subaccounts feature is enabled on the Enable/Disable Features (CS100000) form.
Tax Claimable Account The account that accumulates the tax amounts to be claimed from the tax agency for the tax reporting period.
By default, the account is the one associated with the tax agency, but the default account can be overwritten.
Tax Claimable Subaccount The corresponding tax claimable subaccount.
This box is available only if the Subaccounts feature is enabled on the Enable/Disable Features (CS100000) form.
Use Tax Expense Account A check box that indicates (if selected) that the tax expenses associated with a document line that includes this tax are posted to the tax expense account specified for the document line. If the specified tax expense account belongs to an account group, the tax expenses of the document line are posted with the project-related details specified in the document line. If the tax expense account does not belong to any account group, the tax expenses are posted with the project ID of the non-project code, which by default is X.
This check box appears on the form if Sales, Use, or Partially Deductible VAT is selected in the Tax Type box of the current form (Summary area) for the selected tax.
If this check box is selected, the Tax Expense Account box (and the Tax Expense Subaccount box, if applicable) is available for editing. In these boxes, you specify the expense account (and subaccount, if applicable) to which the system records tax amounts.
If the Projects feature is enabled on the Enable/Disable Features (CS100000) form, and this check box is selected, we recommend creating a separate account group for these tax expenses. If a separate account group for the tax expenses is not used, it may lead to the billing of transactions that should not be billed, such as tax expenses.
 Tax expenses for partially deductible VAT cannot be posted to a dedicated account with a project and project task specified. The expense amount posted to the account selected in the Tax Expense Account box of the current form will have a non-project code in the Project/Contract column on the Journal Transactions (GL301000) form and an empty Project Task column.

If this check box is cleared for a use tax, for a sales tax with the Input group type, or for a partially deductible VAT, the system will post the applicable taxes based on the rules described in Taxes Included in the Cost of Items: Rules of Cost Update.
Tax Expense Account The expense account that is used to record the tax amounts of the Use tax, the Sales tax, or the non-deductible tax amounts of the deductible value-added tax.
For these taxes, this box is available for editing only if the Use Tax Expense Account check box is selected.
Tax Expense Subaccount The corresponding expense subaccount.
This box is available only if the Subaccounts feature is enabled on the Enable/Disable Features (CS100000) form.
Pending Tax Payable Account The liability account that accumulates the amount of taxes to be paid to a tax agency for the pending tax.
Pending Tax Payable Subaccount The corresponding tax payable pending subaccount.
This box is available only if the Subaccounts feature is enabled on the Enable/Disable Features (CS100000) form.
Pending Tax Claimable Account The account that accumulates tax amounts to be claimed from the tax agency for the pending tax.
Pending Tax Claimable Subaccount The corresponding tax claimable pending subaccount.
This box is available only if the Subaccounts feature is enabled on the Enable/Disable Features (CS100000) form.
Retainage Tax Payable Account The corresponding tax payable account that is credited by the tax applied to the retained amount if the Retain Taxes check box is selected on the Accounts Receivable Preferences (AR101000) form.
This box is available only if the Retainage Support feature is enabled on the Enable/Disable Features (CS100000) form.
Retainage Tax Payable Subaccount The corresponding tax payable subaccount that is credited by the tax applied to the retained amount if the Retain Taxes check box is selected on the Accounts Receivable Preferences (AR101000) form.
This box is available only if the Retainage Support feature is enabled on the Enable/Disable Features (CS100000) form.
Retainage Tax Claimable Account The corresponding tax claimable account that is debited by the tax applied to the retained amount if the Retain Taxes check box is selected on the Accounts Payable Preferences (AP101000) form.
This box is available only if the Retainage Support feature is enabled on the Enable/Disable Features (CS100000) form.
Retainage Tax Claimable Subaccount The corresponding tax claimable subaccount that is debited by the tax applied to the retained amount if the Retain Taxes check box is selected on the Accounts Payable Preferences (AP101000) form.
This box is available only if the Retainage Support feature is enabled on the Enable/Disable Features (CS100000) form.

Back to TopPrinting Parameters Tab

You use this tab to define short and long tax labels to be shown in printable versions of the following reports:

This section appears on the form if the following conditions are met:

  • The Canadian Localization feature is enabled on the Enable/Disable Features (CS100000) form.
  • A Canadian tax agency is selected in the Tax Agency box on the Tax Settings tab of the current form. For such a tax agency, Canada must be specified in the Country box (General tab) of the Vendors (AP303000) form.
Element Description
Short Printing Label The short tax label to be shown right of the item the tax is applied to in the reports that are printable versions of taxable documents, such as AR invoices.
For the short printing labels to be printed on documents originating from a specific company, the company must have Canada selected in the Localization box on the Company Details tab of the Companies (CS101500) form.
Long Printing Label The long tax label to be shown in the Total section of the reports that are printable versions of taxable documents, such as AR invoices. This label is followed by the effective tax rate and the total amount of the tax.
Printing Sequence The order in which the tax will be listed in reports that display a printable version of taxable documents.

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