Tax Lookup Hierarchy for EU Transactions

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

1. Tax Item on the customer record
2. Tax Schedule in the Item record for the Subsidiary Nexus
3. 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:

1. Tax Item on Customer A's record
2. Tax Schedule in the Item record for France Subsidiary
3. 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

 

1. Tax Item on the customer record
2. EC Code of Nexus
3. Default Tax Code of Nexus

 

Note for EC Code:

1. Tax Code record = EC Code checkbox must be True
2. 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:

1. Tax Item on Customer A's record
2. UK Tax Code with the EC Checkbox marked to True
3. 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

 

1. Tax Item on the customer record
2. Tax Schedule in the Item record for the Subsidiary Nexus
3. 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:

1. Tax Item on the customer record
2. Tax Schedule in the Item Record for UK Subsidiary
3. 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

 

1. Tax Item on the customer record
2. Tax Code for Exports
3. 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:

1. Tax Item on the customer record
2. Tax Code for Exports for UK (Setup > Accounting > Setup Taxes > UK > Tax Code for Exports)
3. 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