Setting Up a Tax Calendar

Tax reports are based on tax calendars, rather than the GL calendar, since regulatory requirements for tax reporting are often different from the requirements for GL reports.Tax calendars are entity specific. Tax periods are usually full calendar months, but they are defined with start and end dates to provide for any variations that may be needed.

Since tax authorities set the required reporting periods, tax calendars do not necessarily have a relationship with accounting calendars. If the two calendars are similar, when you create a new tax calendar you can base it on an accounting calendar.

Tax calendars are required and the system checks that financial transactions are within an open tax period. The same check is made when operational transactions are posted.

Each entity within a domain can change the status of a tax period separately by manually updating the status to Locked or Reported. No additional tax transactions can be created when the tax point date is in a locked or reported tax period.

Note: You should coordinate changes in the status of tax periods with the accounting periods, which determines if any postings can be created.

Use Tax Period Create (25.4.4.1) to create periods for tax reporting and Tax Period Modify (25.4.4.2) to manually change the period status.

When you choose Create, the following pop-up screen displays. You can create a new year based on either an existing GL year or tax year, or you can create one manually.

This field displays the new tax calendar year to create. The default value is the latest tax calendar year, incremented by one.

Select to use an existing GL calendar year as a template for the new year, and specify the year.

Select to use an existing tax calendar year as a template for the new year, and specify the year.

Setting the tax calendar year displays the Tax Period Create screen for defining period dates and attributes.

Specify a period number. By default, periods are numbered 1 to 12. It is possible to create a maximum of 99 tax periods for a tax year.

Click the down arrow to select a period start date. This is the official start date of the calendar period.

Click the down arrow to select a period end date. This is the official start date of the calendar period.

The system displays the current period status: Open, Locked, or Reported. A new period is created with an Open status. You can manually modify the status to locked or reported.

Open: Tax transactions can be created with effective dates in this period.

Reported: Tax reports have been generated and sent to the authorities.

Use Tax Period Modify to modify the period status. You can also delete a period—use the right-click delete row option—if the period is open and no outstanding transactions exist for it.