This chapter includes details of the data required to process taxes.

Overview
Provides an overview of tax calculation in GTM.

Specifying Tax Data
Describes how to enter tax data for transactions.

Viewing Tax Amounts
Review system-calculated tax amounts.

Correcting Transaction Tax Amounts
Override system-calculated tax amounts.

Exchange Rate Effects
Describes the effect of exchange rates on tax.

Recoverable, Non-Recoverable Tax
Introduces the concepts of recoverable and non-recoverable tax.

Variances
Describes the kinds of variance that can occur during the accounts payable cycle.

Memo Items
Discusses tax processing for memo items.

Returned Items
Discusses tax processing for returned items.

Tax Point Effects
Describes the effect of tax points on tax rates.

Standard Cost, Recoverable Tax Examples
Shows standard costing recoverable tax accruals.

Average Cost, Recoverable Tax Examples
Shows average costing recoverable tax accruals.

Average Cost, Non-Recoverable Tax Examples
Shows average costing non-recoverable tax accruals.

Fixing Common Tax Problems
Describes common tax processing problem.

To calculate taxes on transactions, GTM first identifies the tax environment—the set of tax types for each line item and trailer charge. It then determines the most appropriate tax rate for each tax type in the environment.

GTM searches for an optimal tax environment based on a combination of transaction conditions:

Selection of Tax Environment summarizes the search priority for selecting a tax environment.

If GTM finds a matching environment, it assigns this environment to the transaction. Otherwise, the following message displays:

The system then uses the error environment from Global Tax Management Control (29.24). If this happens, investigate and correct the problem. See Fixing Common Tax Problems.

Next, GTM searches for the tax rate for each tax type in the tax environment. For each tax type, GTM searches for an optimal tax rate based on a combination of transaction and line item conditions:

Selection of Tax Rate summarizes the search priority for selecting a tax rate for a tax type. GTM selects a rate only if there is a complete match between the conditions of the transaction and the tax rate. Any nonmatching criteria must be blank. For example, if a tax rate has a matching item tax class and tax date but a different tax usage, it is not selected.

If GTM finds a matching rate, it uses this rate for the tax calculation. Otherwise, the following message displays:

The message displays the tax type, tax class, and tax usage not found, and no tax is calculated. If this happens, investigate the problem. See Fixing Common Tax Problems.

Tax Rate Selection Criteria describes the tax rate selection criteria for different transaction amounts.