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Configuring Tax Rules

← Configuring Tax Rules

If you sell products with different tax rates or operate different markets where variable or multiple tax rates apply, you need rules to determine the correct tax rate for an invoice line item. To this end, JustOn Billing & Invoice Management supports tax rules. They provide for tax rate lookups along various combinations of account region, merchant or business entity region, product tax class, product group, etc.

To have the software calculate the taxes based on tax rules, you set up the tax rules that meet your business requirements – usually a dedicated tax rule for every applicable tax rate, including one for reverse charge.

Related information:
Tax Rules Concepts
Taxation Approaches

Tax Rules Information

JustOn Billing & Invoice Management implements tax rules using the custom setting Tax Rules. Tax rules include controlling, source, validity and result parameter fields:

  • Controlling fields affect the behavior of the tax calculation.
  • Source fields are used to select the best matching tax rule for the current context.
  • Validity fields are used to restrict the validity of a tax rule for a certain time frame.
  • Result fields are copied to the invoice line item and its tax details.

The following fields are available:

Field Field Type Required Description
Name Result The name of the tax rule, will be copied to the field Applied Tax Rule on the line item or tax detail.
JustOn recommends to keep the name of each tax rule unique and to never change it.
Type Controlling Custom name of a tax type. Types are used to group tax rules to support multiple tax rates per invoice line item. Each group of types is evaluated individually and results in a different tax rate.
Required if you use multiple tax rates.
Start Date Validity Optional start date for this tax rule. The value is compared with the service period of invoice line items. An empty start date is allowed.
The start date is ignored if you use multiple tax rates.
End Date Validity Optional end date for this tax rule. The value is compared with the service period of invoice line items. An empty end date is allowed.
The end date is ignored if you use multiple tax rates.
Business Entity Source Takes the value from the field Business Entity on the invoice to determine the best matching tax rule.
If you make use of business entities, all tax rules for the particular business entity must have the business entity field set.
Invoice Region Source Takes the value from the field Region on the invoice to determine the best matching tax rule.
Invoice Country Source Takes the value either from the field Shipping Country or from the field Billing Country on the invoice to determine the best matching tax rule, see Using Billing Address for Tax Calculation.
To guarantee the correct spelling of countries, JustOn recommends to use Salesforce's state and country picklists.
If you have state and country picklists enabled and configured, make sure to use the country code instead of the country name.
Invoice State Source Takes the value either from the field Shipping State or from the field Billing State on the invoice to determine the best matching tax rule, see Using Billing Address for Tax Calculation.
To guarantee the correct spelling of states, JustOn recommends to use Salesforce's state and country picklists.
If you have state and country picklists enabled and configured, make sure to use the state code instead of the state name.
Account Tax Class Source Takes the value from the field Account Tax Class on the invoice to determine the best matching tax rule.
Product Tax Class Source Takes the value from the field Product Tax Class on the invoice line item to determine the best matching tax rule.
Product Group Source Takes the value from the field Product Group on the invoice line item to determine the best matching tax rule.
Tax Rate Result The actual tax rate that will be applied with this rule. The tax rate is written to the field Tax Rate on the invoice line item or the field Rate on the tax detail.
Tax Code Result The actual tax code that will be applied with this rule. The tax code is written to the field Tax Code on the invoice line item or the field Tax Code on the tax detail.
VAT Category Code Result A code for categorizing VAT regulations, required for e-invoices (see UNTDID 5305 Duty or tax or fee category code). The VAT category code is written to the field VAT Category Code on the invoice line item or the field VAT Category Code on the tax detail.

Defining Tax Rules

Depending on your organization's requirements, you must define tax rules.

  1. Click to enter Setup, then open Custom Settings.

    In Salesforce Lightning, navigate to Custom Code > Custom Settings.

    In Salesforce Classic, navigate to Develop > Custom Settings.

  2. Click Manage in the row of Tax Rules.

  3. Click New.

  4. Specify the details as necessary.

    See Tax Rule Information.

    tax_rule_19vat
    Defining a tax rule to apply 19% VAT for customers in Germany

  5. Click Save.

Tax rules on G/L account assignment

You can configure the G/L account assignment rules to consider the fields Applied Tax Rule and Tax Code on the invoice line item.

Be aware of the following aspects:

  • The fields are not set if there is no best matching tax rule or the tax rate has been taken from a source record.
  • Applied Tax Rule and Tax Code hold a comma-separated list in case of multiple taxes per line item.