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The next step is to create the tax rate structure. To enter tax rates:

Expand Expense by clicking on the plus sign.
Expand Taxes by clicking on the plus sign.
Click on Tax Rate.
Click on the Add button.
Fill in the following fields:
1. Operating Unit: Applies tax rate to single Operating Unit. If the field is left empty, the rate will apply to all Operating Units. (If T&E Option "Expense - VAT Rate" is set to Operating Unit)
2. Location: Applies tax rate to single Location. If the field is left empty, the rate will apply to all Locations. (If T&E Option "Expense - VAT Rate" is set to Location)
3. Expense Type*: The expense type that this tax rate is applicable.
4. Country*: The country in which this tax rate is applicable.
5. State ID*: If a specific state is subjugated to this tax rate, enter it here
6. Currency*: The currency in which this tax rate is applicable
7. Effective Date*: The date in which the tax rate takes effect.
8. Tax 1 Code*: VAT will be charged to this code (The code must first be created. See Tax Code.)
9. Tax 1 Rate*: The rate for the Tax 1 Code.
10. Tax 1 Calculation*: Defaults to VAT: Based on Total Amount
11. Tolerance (%)*: If a tolerance is allowed from the tax calculation
12. Recovery (%)*: If there is a recovery percentage allowed from the tax calculation
13. Tax 2 Code: An optional second level tax code.
14. Tax 2 Code: The rate for the Tax 2 Code.
15. Tax 2 Calculation*:
  1. VAT: Prorated - If the tax calculation is prorated.
  2. VAT: Based on Total Amount - If tax amount is calculated based off the business total.
16. Tolerance (%)*: If a tolerance is allowed from the tax calculation
17. Recovery (%)*: If there is a recovery percentage allowed from the tax calculation
18. Description: Enter text to further identify the tax rate. This field is limited to 255 characters.
19. Active*: Check the box if this tax code is to be available for selection now. (Checked by default)
Click Save.
Repeat the above processes until all required tax rates are entered.

...

	Expense Type Setup Screen
	Optional Compute Tax is Enabled	Optional Compute Tax is Enabled	Optional Compute Tax is Disabled	Optional Compute Tax Is Disabled
End User Interface
"Tax Included" checkbox is checked	Yes (see ex. 1)	No (see ex.2)	Yes	No
Business Amount is Tax inclusive:	Yes	No	Yes	No
Tax is added to Business to calculate Business Total	No	Yes	No	Yes
Auto Compute Tax is checked	Yes	No	Not Available	Not Available
The Tax field can be set to zero	No	Yes	No	No
Changing Business field triggers re-calculation of Total	Yes	Yes	Yes	Yes
Changing Business field triggers re-calculation of Tax	Yes	No	Yes	Yes
Changing Tax field triggers re-calculation of Business	No	No	No	No
Changing Tax field triggers re-calculation of Total	Yes	Yes	Yes	Yes

Example of how to does the Tolerance % works:

If tolerance rate TL= 10%, Tax rate T = 15%, expense before tax amount Amt=$100,

Tax Amount TX_Amt= Amt* t = $100*15% = $15;

Tolerance amount TL_Amt= TX*TL = $15*10%=1.5

Tax tolerance range: Max allowed amount = TX + TL_Amt = $15 + $1.5 = $16.5

Min allowed amount = TX – TL_Amt = $15 - 1.5 = $13.5

The user input tax amount will be invalid if the amount is greater than $16.5 or less than $13.5

Versions Compared

Old Version 4

New Version 5

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