1. Select the Admin tab then select the
Tax Codes option from the left-hand side of the page;
2. From the Tax Codes page, click
Add Tax Code;
3. From the Tax Code Edit page, enter a name for the
Tax Code;
4. Enter a meaningful
Description for the tax code;
In some cases it may be obvious what the code is representing, however, a description should always be entered.
The tax rate is subtracted from Gross, and calculated using the formula:
Tax Rate = Tax Rate x 100 / (1 + Tax Rate)
Example: For 4% = 0.04 x 100 / 1.04 = 3.8461538
6. Activate the appropriate
Calculate Tax By flag;
7. Activate the
Domestic Default flag if the code is to be the default for domestic transactions;
8. Activate the
Foreign Default flag if the code is to be the default for foreign transactions;
9. If necessary, activate the
Check Tax Threshold? flag;
i. Enter the threshold
Limit (net amount);
ii. Enter the threshold
Message.
11. Enter the GL code to assign to the tax code by clicking in each segment field and making the appropriate selection from the segment search list on the right;
12. Click
Update Changes.
