Tax Rates

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.

*Indicates a Required Field

Tax Rate Notes

Two levels of taxes: If there are two levels of Tax, the second level is set up in the same fashion as the first. Different rates and tolerances can be configured for each level. If there is a second level, the first level rate must be greater than 0.00 and tax 2 Code should be set to VAT: Prorated. If there is only one VAT tax, it must be set as Tax1. If there are two VAT taxes and one is VAT prorated, the prorated must be set up as Tax 2 Code.

Expense Type > Optional Compute Tax: Use this expense attribute to allow to zero out the tax rate. See the tax setup matrix below for details.

Expense Type > City Field: If Tax rates are set up, the City Field must be enabled.

Expense Type > Tax Field: If users are not to review or change the VAT calculation, the value in this field should be zero (0).

Taxable and non-Taxable expenses: Expense Reports can have expenses that have a Tax and expenses that do not have a Tax field enabled.

Tax on Mileage: Tax can be calculated on a mileage expense type, but the calculation is not shown to the user.

Tax on Per Diem and Mileage/Fixed Rate expense types: Tax cannot be calculated on a per diem and fixed rate expense types.

Tax Setup Matrix:

	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 1:

Screenshot of end user interface screen when "Tax Included" checkbox is checked.

The end user enters the tax-inclusive amount in the Business field and the system derives the business amount and tax.
Example 2:

Screenshot of end user interface screen when "Tax Included" checkbox is un-checked.

The end user enters pre-tax amount in the Business field and the system derives the business total amount and tax.