Set up Advanced Tax

You can set up Advanced Tax for Order Entry, Purchasing, or both. In companies with a Taxes subscription, Advanced Tax is not supported in General Ledger, Accounts Payable, or Accounts Receivable.

Subscription Taxes
Regional availability

All regions
User type Business user with admin privileges

Prepare for setup

Complete the basic tasks in the following table before initiating the setup tasks for a tax solution.

Task Description

Set the locale language for your country

The locale language determines the terminology that's displayed.

If you select AU as the locale language, then the US term "checking account" becomes "cheque account", and in the UK locale, the US term "checking account" becomes "current account".

To set the locale language, go to Company > Setup > Company. Select Edit and, in the Global settings section, select Language.

Learn more about Terminology across locales.

Set the accounting method

Select Accrual only for the accounting method. The Taxes application supports accrual accounting and the accrual side of dual-method accrual and cash basis accounting. Cash basis accounting is not supported.

Cash basis tax capture is supported only in France for companies or entities that use the TVA Française standard tax solution.

Enter a VAT registration number and operating country

Ensure a VAT registration number and operating company have been entered on the Company Information page. The number that you enter must be the number that's registered with the tax authority for your country. If you change the VAT registration number after you start entering taxable transactions, your tax submissions will be incorrect.

The Deutsche Umsatzsteuer standard tax solution for Germany uses the steuernummer domestic tax ID for the UStVA return.

Learn more about editing company information.

 

Advanced tax setup checklist

Complete the tasks in the following table to set up one or more Advanced Tax solutions. These tasks assume that the Taxes application has already been configured for multiple tax jurisdictions.

To learn more, see Configure taxes.

Task Description Notes
Create at least one GL account

Create at least one GL account to capture sales tax when transactions are posted to the GL. Typically, a liability account is used.

When you create the tax details in a later step, you'll specify which GL account to use for each tax detail.

Best practice: While you can use the same GL account for the tax details for both sales and purchases, some organizations find it more helpful to track the taxes for sales and purchases separately, using two different GL accounts.
  
Grant tax permissions

Grant the Taxes permissions for Tax Solutions to the users who will configure the Advanced Tax solutions in your organization.

Learn more about granting permissions to users.

 
Configure the tax solution

Add a custom Advanced Tax solution:

  1. Go to Taxes > Setup > Tax solutions.
  2. Click Add.
  3. Enter a Tax solution name and select Advanced Tax for Tax engine.
  4. Click Save.

Learn more about configuring tax solutions.

  
Define the tax objects for calculating tax

Create the tax objects that are needed to calculate the tax in this order:

  1. Contact tax groups—Taxes application for suppliers and customers
  2. Item tax groups—Taxes application
  3. Tax authorities
  4. Tax details—Taxes application
  5. Tax schedules—Taxes application
  6. Tax schedule maps—Taxes application

You can create these objects in the product interface or by importing them.

Make sure you specify the name of the tax solution when you create the objects. Each tax object belongs to only one tax solution.

To learn about the interaction of these tax objects and how tax schedule maps drive the tax rates that are applied, see Tax schedule maps—Taxes application.

  
Define customers as taxable and assign to contact tax groups

Taxes can be added to Order Entry transactions when the customer is marked as taxable and is assigned to a contact tax group.

The contact tax group associated with the customer ship-to contact is used to determine which tax details are automatically chosen and applied to calculate the tax per line item.

If a customer's ship-to contact is the same as the primary contact, marking the customer as taxable and assigning the customer to a contact tax group is sufficient. If the ship-to and primary contacts differ, make sure the ship-to contact is marked as taxable and is assigned to a contact tax group.

Learn more about adding or editing customers and editing contacts.

Instead of manually editing customer information or contact information, you can import customer information to define the primary contact and ship-to contact attributes. Learn more about importing customers.

In multi-entity organizations, suppliers can be added at the top or entity level.

Required for:

  • Order Entry

 
Define suppliers as taxable and assign to contact tax groups

Taxes can be added to Purchasing transactions when the supplier is marked as taxable and the appropriate contact is assigned to a contact tax group.

The contacts that you want to ensure are in the appropriate contact tax groups depend on whether Purchasing is configured for deliver-to contacts:

  • If Purchasing is configured for deliver-to contacts, you want to make sure the deliver-to contacts are marked as taxable and assigned to the appropriate contact tax groups.
  • If Purchasing is not configured for deliver-to contacts, you want to assign the return-to contacts for your suppliers to the appropriate contact tax groups. Because sales tax is based on where the item ends up, you most likely want to change the return-to contact for the supplier to your company contact or your warehouse contact and assign that contact to the contact tax group.
Best practice: Enable Purchasing for deliver-to contacts.

Learn more about adding or editing suppliers and editing contacts.

Instead of manually editing supplier information or contact information, you can import supplier information to define the primary contact and pay-to contact attributes. Learn more about importing suppliers.

In multi-entity organizations, suppliers can be added at the top or entity level.

Required for:

  • Purchasing
Define items as taxable and assign to item contact tax groups

Taxes can be added for an item in an Order Entry or Purchasing transaction when the item is marked as taxable and assigned to an item tax group.

Learn more about adding or editing items.

Instead of manually editing item information, you can import item information. Learn more about importing items.

In multi-entity organizations, items can be added at the top or entity level.

Required for:

  • Order Entry
  • Purchasing
Create printed document templates

Create a document template to use for printed sales invoices in Order Entry. Sage Intacct provides samples from which you can start.

Learn more about creating printed document templates.

Required for:

  • Order Entry
Create at least one Order Entry transaction definition

To post sales tax in transactions, you need at least one Order Entry transaction definition with these attributes:

  • The Enable subtotals checkbox is selected.
  • One subtotals line is configured for tax. Make sure that only one line in the transaction subtotals table is marked as Is Tax (taxes get calculated twice if you have more than one line marked as Is Tax). If one line is not configured for tax, no taxes will be calculated for the transaction.
  • The Transaction posting is to Accounts Receivable or the General Ledger. Unless you have other workflow needs, you typically post to the GL through the AR subledger and not directly.

When a transaction that uses this transaction definition is posted, sales tax is posted to the GL and captured for the Sales Tax Report.

To see the calculated taxes in a non-posting transaction, such as a sales order, enable subtotals in the transaction definition and configure one subtotals line for tax.

Learn more about creating or editing Order Entry transaction definitions.

In multi-entity organizations, transaction definitions can be added at the top or entity level.

Required for:

  • Order Entry
Create at least one Purchasing transaction definition

To post sales tax in transactions, you need at least one Purchasing transaction definition with these attributes:

  • The Enable subtotals checkbox is selected. If subtotals are not enabled, no taxes will be calculated.
  • One subtotals line is configured for tax. Make sure that only one line in the transaction subtotals table is marked as Is Tax (taxes get calculated twice if you have more than one line marked as Is Tax). If one line is not configured for tax, no taxes will be calculated for the transaction.
  • The Transaction posting is to Accounts Payable or the General Ledger. Unless you have other workflow needs, you typically post to the GL through the AP subledger and not directly.

When a transaction that uses this transaction definition is posted, sales tax is posted to the GL and captured for the Sales Tax Report.

To see the calculated taxes in a non-posting transaction, such as a purchase order, enable subtotals in the transaction definition and configure one subtotals line for tax.

Learn more about creating or editing Purchasing transaction definitions.

In multi-entity organizations, transaction definitions can be added at the top or entity level.

Required for:

  • Purchasing
Finalize the setup

For multi-entity organizations, you want to ensure that your entities are defined correctly with the appropriate tax solution, operating country, and VAT registration number.

See Finalize tax solution setup.