Setting Up Transaction Fiscal Classifications

You can use transaction fiscal classifications for tax regimes and taxes where the nature of the transaction itself determines the tax and the tax rate that applies. For example, different taxes and rates might apply to sales of inventory items vs. sales of manufactured goods, or might depend upon the ship-from and ship-to locations involved in the transaction. You can also use transaction fiscal classifications to classify the accompanying documentation required by a transaction.

You can set up these types of transaction fiscal classifications:

• Transaction business categories

• Transaction fiscal classification codes

• Document fiscal classifications

• User defined fiscal classifications

E-Business Tax makes transaction fiscal classification codes available at transaction time for entry at the header level or line level. The available codes are both the country-specific codes of the applicable tax authority, and any non-country specific codes. You can also use transaction fiscal classifications as determining factors in tax rules. 

Setting Up Transaction Business Category Codes

E-Business Tax provides six transaction business categories that you can use to identify and classify your business transactions. The six transaction business categories are:

• Expense report

• Purchase pre-payment transaction

• Purchase transaction

• Sales transaction

• Sales transaction adjustment

• Intercompany transaction

You can use transaction business categories directly to classify transactions, and use transaction business category codes as determining factors in tax rules. You can assign a transaction fiscal classification to multiple transaction business categories and use this fiscal classification in tax rules, thus applying the same rule to several business transaction events, such as for Purchasing and Payables transactions, or Payables and Receivables transactions.

To set up a transaction business category code:

1. Navigate to the Transaction Business Category Codes page.

2. Select your hierarchy view of the transaction business category code path.

3. Use the sub-level to navigate to the Create Transaction Business Category Code page.

4. Enter a transaction business category code and name.

   E-Business Tax appends this code to the code path for this transaction business category.

5. If necessary, enter the country that this transaction business category code applies to.

   You must ensure that the regime assignments of the transaction fiscal classification types that you associate with this transaction business category code are consistent with the country assignment.

6. Enter the effective date range.

   Enter a date range that is within the date range of the transaction business category or transaction business category code that this level belongs to.

7. Enter the transaction fiscal classification types and fiscal classification codes, and their effective date ranges, to associate with this transaction business category.

Setting Up Transaction Fiscal Classification Codes

Set up transaction fiscal classification codes to classify transactions for tax determination and tax reporting purposes according to the requirements of a tax authority.

You can create a hierarchy of transaction fiscal classification codes for use with a transaction business category to identify specific transaction events, such as employee expense reports vs. contractor expense reports or retail sales vs. product demonstrations, and, if applicable, designate codes for specific countries.

To set up a transaction fiscal classification code:

1. Navigate to the Create Transaction Fiscal Classification Type page.

2. If necessary, enter the number of levels in the hierarchy for this transaction fiscal classification type.

3. If you are setting up a hierarchy of transaction fiscal classification types:

   • In the Delimiter field, enter a character to separate the concatenated display of the fiscal classification type codes in this hierarchy. This display is used to identify a hierarchy when you create tax rules using transaction fiscal classifications.

     Do not use a character that occurs in any fiscal classification code. The recommended characters to use as delimiters are: '\' or '>' or '<'.

   • In the Type Group field, enter a name to identify this hierarchy.

4. Enter a transaction fiscal classification type code and name, and the effective date range.

5. Assign the transaction fiscal classification type to the applicable tax regimes and enter an effective date range for each tax regime assignment.

   Enter a tax regime assignment date range that is within the date range of the transaction fiscal classification type and the tax regime.

6. If necessary, create fiscal classification codes for this transaction fiscal classification type or type group.

7. If you associated tax reporting types with fiscal classification, enter any applicable tax reporting codes for each fiscal classification code.