Tax handling in AP Automation with Purchasing

For companies that use the Taxes application, AI/ML populates tax information on a draft transactions as follows.

You can change the Tax solution from a non-VAT tax solution (example: Advanced Tax) to a VAT or GST tax solution. You can also change the Tax solution from one VAT or GST tax solution to a different VAT or GST tax solution. You cannot change a Tax solution from a VAT or GST tax solution to a non-VAT tax solution.

Top-level transactions

For top-level transactions, when Is tax is selected in the transaction definition, the Tax solution field appears. The tax solution is derived based on the following logic:

  • The tax solution that was assigned to the matched purchase order.

  • If the matched transaction does not have an assigned tax solution, this field is blank and you can select the appropriate tax solution.

The tax rate is populated based on existing tax schedule mapping, if there is any.

When Is tax is not selected in the transaction definition, there is no tax solution for the transaction.

Entity-level transactions

The tax information for entity-level transactions is based on the entity's assigned tax solution. The tax rate is populated based on existing tax schedule mapping, if there is any.