Set up tax condition sets to group together the tax conditions that constitute a tax rule. You can set up tax condition sets in advance and apply them to a tax rule, or you can set up a tax condition set during tax rule creation.
The tax condition set is the logic of the tax rule. It specifies the factors to consider, and the resulting value that must exist for each factor, in order for the result of the tax rule to be true.
Each tax condition in a tax condition set consists of a tax determining factor (determining factor class/class qualifier/determining factor name), an operator, and a value. These examples illustrate the use of tax conditions.
Example 1Tax regulation: If a customer and supplier are not registered for Tax A, then Tax A does not apply to the transaction.
Tax conditions:
| Tax Condition | Determining Factor Class | Class Qualifier | Determining Factor Name | Operator | Value |
|---|---|---|---|---|---|
| 1 | Registration | Ship From Party | Registration Status | Equal To | Not Registered |
| 2 | Registration | Ship To Party | Registration Status | Equal To | Not Registered |
Tax regulation: State Tax B applies to intrastate sales of Products 11 and 12.
Tax conditions:
| Tax Condition | Determining Factor Class | Class Qualifier | Determining Factor Name | Operator | Value |
|---|---|---|---|---|---|
| 1 | Geography | Ship From | State | Not Equal To Determining Factor | Ship To |
| 2 | Product - Non-Inventory Linked | Level 2 | Product Category | Range | From Range: Product 11 To Range: Product 12 |
Tax regulation: Tax C applies to all export sales.
Corresponding tax conditions:
| Tax Condition | Determining Factor Class | Class Qualifier | Determining Factor Name | Operator | Value |
|---|---|---|---|---|---|
| 1 | Geography | Ship To | Country | Not Equal To Determining Factor | Ship From |
| 2 | Transaction Generic Classification | Level 1 | Transaction Business Category | Equal To | Sales Transaction |
A tax condition set should reflect both the tax regulations of a tax authority and your business requirements, for the application of a specific tax to a specific set of circumstances. When the elements of the transaction meet all of the tax regulations, then the rule result is true and the rule applies to the transaction.
See: Translating Tax Regulations into Tax Rules for more information about using tax conditions in tax rules.
See: Setting Up Country-Specific Taxes for complete examples of tax conditions used in tax rules.
Attention: Due to performance issues, you should use a maximum of ten determining factors in one tax condition set.
Before you can set up tax condition sets, you may need to complete one or more of these tasks:
Set up determining factor sets. (mandatory)
Set up values for the applicable determining factor classes. (mandatory)
To set up a tax condition set:
Navigate to the Create Tax Condition Set page.
Enter a code and name for the tax condition set.
Enter or create the determining factor set to use with this tax condition set.
See: Setting Up Tax Determining Factor Sets for information about creating a determining factor set.
If the determining factor set uses the Accounting determining factor class, enter the ledger to use with this tax condition set.
If this tax condition set is for the tax regimes of a specific country, enter the country name.
Navigate to the Create Tax Conditions page.
E-Business Tax displays all of the determining factors belonging to the determining factor set. From the point of view of the tax condition set, each determining factor--together with the operator and value that you define--becomes a tax condition.
If you do not want to use a tax condition, check its Ignore Condition box.
If a determining factor has the Required option enabled in the determining factor set, then you must use the tax condition in the tax condition set.
Set the operator to use for the tax condition:
Equal To/Not Equal To - Either the condition is equal to a single value, or the condition excludes a single value.
Equal To/Not Equal To Determining Factor - Either the condition is equal to a class qualifier of the determining factor class, or the condition excludes a class qualifier of the determining factor class.
Is Null/Is Not Null - Either the condition is equal to a null value or it is not a null value. The transaction value is compared to determine rule result.
Range - The condition is equal to a range of values, any one of which makes the condition true.
Enter the value or range of values for the tax condition:
If the operator is Equal To/Not Equal To, enter a determining factor name value in the Value/From Range field.
If the operator is Equal To/Not Equal To Determining Factor, enter a class qualifier of the determining factor class in the Value/From Range field.
If the operator is Is Null/Is Not Null, you cannot enter a value or range.
If the operator is Range, enter the determining factor name value range in the From and To fields.
E-Business Tax refers to the code associated with the determining factor name to determine a range of values. A code range is a numeric value in ascending order.
Note: Once you use a tax condition set to create a tax rule, you can no longer update the condition set.