Create Tax Code – A summary of the activity

This activity allows you to create a Tax code and also associate a tax rate to the tax code. One tax code can have multiple tax rates defined for it provided the periods do not overlap. Different goods and services attract different tax rates.

The tax rate is specified by the Government and is applicable for both purchase and sale of Goods and Services.

You can also specify the period during which the tax code is valid. The system updates the status of the tax codes to “Active” on creation. The system records the login ID of the user in “Created By” and the system date in “Created Date” fields.

Tax Codes are defined from a Tax Type – Tax Community & Tax Region Combination. Against each Tax Code, the applicable Tax rate must be specified. You must specify the period during which the Tax Code will be valid. “From” date is mandatory, “To” date is calculated by the system automatically as one day less than the “From” date of the succeeding period. Tax rate is the percentage or unit rate used to compute the taxable portion for an item or service. If Tax Basis is selected as “Unit”, the Tax UOM field must be entered.

Code types can be Regular or Surcharge. The provisions to define Regular & Surcharge Tax Codes are controlled through the properties set for the Tax Type & Tax Community in the TSET Component.