Setting Up Tax Statuses

A tax status is the taxable nature of a product in the context of a transaction and a specific tax on the transaction. You define a tax status to group one or more tax rates

that are of the same or similar nature.

For example, one tax can have separate tax statuses for standard, zero, exemption, and reduced rates. A zero rate tax status may have multiple zero rates associated with it in order to handle different reporting requirements for zero rate usage, such as Intra EU, zero-rated products, or zero-rated exports.

You define a tax status under a tax and a configuration owner, and define all applicable
tax rates and their effective periods under the tax status. The tax status controls the
defaulting of values to its tax rates.

Prerequisites

Before you can set up tax statuses, you may need to complete one or more of these tasks:

• Set up taxes. (mandatory)
• Set up tax reporting types. (optional)

Set Up a Tax Status

• Navigate to the Create Tax Status page.

• Enter the Tax Regime Code, Configuration Owner, and Tax.

• Enter a Tax Status Code and name for this tax status. Use a coding convention that is in keeping with the tax regime and tax. The tax status code must be unique within the tax, configuration owner, and effective date range.

• Enter the Effective Dates for this tax status. You must enter a date range that is within the date range of the tax.

• Indicate if this is the Default Tax Status for this tax. If you define tax status rules for this tax, then this tax status becomes the default status only when no tax status rule applies to a transaction. 

• If this is the default tax status for this tax, enter the effective dates that this tax status is the default tax status. You must enter a default status effective date range that is within both the effective date range of the tax and of the tax status. If you do not enter a date range, then this remains the default status indefinitely.

• If you associated tax reporting types with tax status, enter any applicable tax reporting codes. 

• Set the default controls for this tax status. These values default to all tax rates for this tax status:

• Check the Allow Tax Exemptions box to create tax exemptions for your customers for this tax status. 

• Check the Allow Tax Exceptions box to create special tax rates for specific products for this tax status. 

• Check the Allow Tax Rate Override box to let users change the tax rate code derived from this tax status on transaction lines. Do not set this option if this tax status is for offset taxes.

• If you set the Allow Tax Recovery option for this tax, select the default recovery settlement to use for this tax status: 

• Immediate - Tax recovery is available at invoicing; 

• Deferred - Tax recovery is available only after the invoice is paid.