Setting Up a Third Party Tax Profile

Set up third party tax profiles for your customers and customer sites and suppliers and supplier sites. You can also maintain migrated tax information for your customers and suppliers for backward compatibility.

Prerequisites

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

• Set up parties. (mandatory)

• Set up tax regimes. (optional)

• Set up taxes. (optional)

• Set up tax jurisdictions. (optional)

• Set up lookup codes. (optional)

• Set up party fiscal classifications. (optional)

• Set up tax reporting types. (optional)

• Set up customer and supplier accounts. (optional)

Setting Up a Party Tax Profile for a Third Party

• Navigate to the Party Tax Profiles page.

• Select a third party or third party site.

• Navigate to the Create Tax Profile page.

Party main information values default to all tax registrations and invoices belonging to this party. You can update these values at the tax registration level and at the invoice line level.

Note: The values set at the tax registration level override the values set at the party tax profile level.

• Check the Allow Tax Applicability box to automatically calculate taxes for this party whenever the party acts as a supplier. You can set this option, for example, for customers that also act as suppliers on transactions.

• Check the Allow Offset Taxes box to allow calculation of offset taxes with this party or party site. 

  You must also perform the related tasks for setting up offset taxes for the taxes involved in transactions for this third party or third party site. 

• If applicable, enter the default tax classification code to use as a determining factor in tax rules for this party or party site. E-Business Tax defaults a tax classification code to the transaction line according to the application tax options defaulting hierarchy defined for the combination of operating unit and application. 

• Set the rounding level and rounding rule for this party. 

• Use the event class options to review the rounding precedence hierarchy for specific applications and event classes. If you updated the rounding precedence hierarchy for a specific configuration owner and event class, then the related transactions look instead for rounding level information according to the configuration owner and event class settings. 

• If this party or party site intends to send or receive invoices with invoice line amounts inclusive of tax, check the Set Invoice Values as Tax Inclusive box. 

  This option overrides the tax inclusive handling setting at the tax level, but not at the tax rate level. 

• Set up the tax registrations required for this party or party site:
• Set defaults for all tax reporting for tax registrations of this party or party site for country, tax registration number, and tax registration type.

• Complete the tax registration setup. 

• If applicable, associate third party fiscal classification codes with this party. The party fiscal classification codes you enter become part of tax determination for invoices associated with this party. 

• If this is a customer third party or third party site, set up the applicable tax exemptions. 
• If you associated tax reporting types with party tax profile, enter any applicable tax reporting codes.