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Create Tax Sets

Overview

Once a tax method is chosen within the taxation configuration, the configuration settings will load and the Tax Group Configuration form will populate below. The process for creating tax sets below is applicable to the Aria Internal Tax Engine and the form will depend on the tax method chosen.

Next, you should create tax sets within the taxation configuration by following the steps below.

Creating Tax Sets

Getting Here: Click Configuration > Integrations > Taxation Configuration > Add Tax Set

  1. Type a brief description for the jurisdiction for which you are configuring taxation in the Description field.
  2. Choose a jurisdiction for which this tax will be assessed from the Jurisdiction drop-down.

The contents of this drop-down change depending on the country that you chose in the prior taxation configuration step. Once the taxation configuration is complete, any new or existing customers residing in this country and jurisdiction, who consume a taxable service, are taxed.

  1. Select an option from the Calculate Tax After Credits Applied field.

Note: When configuring a third-party tax service provider, tax is always assessed after a credit is applied to an invoice item (the equivalent of choosing Yes on this screen).

  •  No: This tax is assessed for the amount of the invoice before a credit is applied to an invoice line item.
  • Yes: This tax is assessed for the amount of the invoice after a credit is applied to an invoice line item. If the credit is 100% of the invoice, then there is no tax. But if the credit is a partial amount, tax is calculated on the remaining balance.
  1. Select an option from the Send Discount Line Items For Tax Calculation field. This field is visible only if Calculate Tax After Credits Applied is set to No.
  • Yes sends the corresponding line item discount amounts separately for tax calculation.
  • No only sends the service line items for tax calculation.

Refer to the following scenarios to understand how these settings impact tax calculation:

  • To calculate tax separately for both the line item’s gross price and the line item’s discount:
    • Set Calculate Tax After Credits Applied to No.
    • Set Send Discount Line Items For Tax Calculation to Yes.
  • To calculate tax only on the gross amount and not on the discount amount:
    •  Set Calculate Tax After Credits Applied to No.
    • Set Send Discount Line Items For Tax Calculation to No.
  • To calculate tax after credits are applied:
    • Set Calculate Tax After Credits Applied to Yes.
    • Send Discount Line Items For Tax Calculation is not available in this scenario.
  1. Select an option from the Tax Service Group section.
  2. Enter a Rate.

Note: You cannot leave the Rate field blank but the field will accept a zero (0) value after clicking Add Rate button, if "0" is desired.

  1. Select a Start Date and an End Date.
  • Start Date: The date on which you will begin to charge customers for this tax at the specified rate.

The default date is the day that the field is being selected (today). However, you may wish to choose a date in the future. For example, if you are configuring your production instance and you are using a third-party tax engine, you may wish to delay the assessment of taxes until you have completely updated your third-party tax engine to work with your production instance.

  • End Date: The date on which you will no longer charge customers for this tax at the specified rate.

This is not a required field, however, you may wish to specify an end date if you know that the tax rate for the jurisdiction will change. In that case, you could specify a calendar date of one day before the rate change, then add another row specifying the new rate with a start date of the jurisdiction rate change.

  1. Choose a service name from the Service drop-down.

This is the name that will be presented in Aria when reviewing a customer’s invoice, and on the statements sent to customers if your statement template is configured to show tax-based services.

  1. Click the Add Tax Set button.

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This tax set has been added to the taxation configuration and can be accessed at any time by going into that taxation configuration and clicking the Internal Values tab.

You can add a tax set for another jurisdiction in the same country by clicking the Add Tax Set button at the bottom of the Taxation Configuration screen. You can also add an additional tax set at any time.

 

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