Tax Codes Tab of Tax Codes Configuration
Use the Tax Codes tab to set up tax codes that are used for calculating taxes throughout Deltek.
This tab contains different content based on whether or not you select the Enable Tax Auditing Feature check box on the Tax Auditing tab in . When you enable the Tax Auditing feature, this tab contains the following additional items: Inputs section, Thresholds section, Non-Recoverable Tax section, Tax Code to Include in Basis field, and Tax Currency field (if you use multiple currencies).
Fields
Thresholds Section
This section displays only if you enabled the Tax Auditing feature.
| Field | Description |
|---|---|
| Low Rate and High Rate | Enter the lowest and highest tax rate to limit what users can enter when they override the default tax rates in . The taxes entered in Transaction Entry are used to calculate tax amounts for AP vouchers, AP disbursements, employee expenses, cash receipts, cash disbursements, invoices, and journal entries. |
Fields
| Field | Description |
|---|---|
| Tax Currency | This field displays only if you use multiple currencies and you enabled the Tax Auditing feature. From the drop-down field, select the currency that applies for this tax code. The tax currencies that are included in the drop-down list include all the currencies that are enabled for the active company. This allows you to run reports, including the Tax Analysis report, in the currency of the tax code. Even if the tax currency is the same as the functional currency, you must enter the currency in order to run tax reports in a single currency. |
| Tax Region | From the drop-down list, select a tax region for the tax code. The drop-down list includes the tax regions that you set up on the Tax Auditing tab in
.
Specifying a tax region allows the drop-down list in the Tax Code fields in AP voucher entry, AP disbursement entry, and invoice billing terms to include only the tax codes that are appropriate for the vendor or client's specific address that you enter for the transaction or billing terms. The appropriate tax codes are based on the vendor and client's tax country (entered in the Firms hubs) and a tax code's region, which is associated with a country. |
Outputs Section
This section is not enabled if you make entries in the Non-Recoverable Tax section on this tab.
The Outputs section applies if you will use a tax code for an output tax. Select the specific invoice charges for which the tax code applies. The tax code is then included in the drop-down list for tax fields in those entry areas.
When the Tax Auditing feature is not turned on, the tax codes that you set up as output taxes in this section can be applied only to invoices created in Billing.
When the Tax Auditing feature is turned on, the tax codes that you set up as output taxes can be applied to Billing invoices as well as to invoices and cash receipts that you enter in Transaction Entry. For a tax code to be available for invoice entry or cash receipt entry in Transaction Entry, you can set it up as an output only tax (it has at least one of the check boxes selected in the Outputs section), or you can set it up as both an input and output tax (it has at least one of the check boxes selected in the Outputs section and at least one of the check boxes selected in the Inputs section—the Transaction Entry check box, in this case).
- Billing Terms, Interactive Billing, and Batch Billing in Billing
- Default Terms in Billing Configuration
- Cash Receipts in Transaction Entry
- Invoices in Transaction Entry
| Field | Description |
|---|---|
| Labor Billing | Select this check box if the tax applies to billing labor charges. |
| Consultant Billing | Select this check box if the tax applies to billing consultant charges. |
| Expense Billing | Select this check box if the tax applies to billing expense charges. |
| Fee Billing | Select this check box if the tax applies to billing fee charges. |
| Unit Billing | Select this check box if the tax applies to billing unit charges. |
| Add-on Billing | Select this check box if the tax applies to billing add-on charges. |
| Field | Description |
|---|---|
| Account |
This field is enabled only if you select a check box in the Outputs section. Click
You must enter an account in this field if any of the check boxes are selected in the Outputs section or in the Tax Applies To group on the Intercompany Billing tab on the Tax Codes form (if you use multiple companies and intercompany billing). This account is used when this tax code is applied to the specific part of a Billing invoices that is associated with the check box that you selected in the Output section. If you enter a revenue account, your project revenue is higher after you post the invoice. If you enter a liability account, Deltek excludes the sales tax amount from project billings or revenue figures. When you enter a liability account, the typical general ledger entry following the invoice posting would be a cash disbursement that debits the Sales Tax Payable account (the account that you enter in this field). |
Fields
| Field | Description |
|---|---|
| Available for Purchasing | This check box displays to the right of the Outputs section only if you have the Purchasing application installed and you do not have the Tax Auditing feature enabled. |
| Select this check box to make the tax code available for the Purchasing application.
If you clear the Available for Purchasing check box after you have selected it, and there is a tax code entered in the Tax Code and/or Tax-2 Code fields in the Ship-To grid on the Ship tab in , you will receive an error. You will not be able to clear the Available for Purchasing check box until you remove the tax codes entered on the Ship tab. | |
| When the Tax Auditing feature is enabled, the Available for Purchasing check box displays in the Inputs section on this tab, rather than displaying to the right of the Outputs section. |
Inputs Section
This section displays only if you enabled the Tax Auditing feature.
This section applies if you want a tax code to be used for an input tax. Select the areas in Deltek for which the tax code applies. The tax code is then included in the drop-down list for the tax fields in those entry areas.
Input taxes are applied to accounts payable vouchers, accounts payable disbursements, employee expenses, cash disbursements, and journal entries in the Transaction Center and to expense reports in Time & Expense.
For a tax code to be available for cash receipts and invoices in the Transaction Center, you must set it up as both an input and output tax (with the Transaction Entry check box selected in the Inputs section) or set it up as an output only tax code.
| Field | Description | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Available for Purchasing | This check box displays only if you have the Purchasing application installed.
Select this check box to make the tax code available for the Purchasing application. When you select this check box, the Transaction Entry check box is automatically selected. This allows the tax feature to work correctly when you create vouchers from purchase orders in Accounts Payable. The Transaction Entry check box must be selected when the Available for Purchasing check box is selected. If you clear the Available for Purchasing check box after you have selected it, and there is a tax code entered in the Tax Code and/or Tax-2 Code fields in the Ship-To grid on the Ship tab in , you will receive an error. You must remove the tax codes that are entered on the Ship tab before you can clear the Available for Purchasing check box. When the Tax Auditing feature is not enabled, the Available for Purchasing check box displays to the right of the Outputs section instead of in the Inputs section. |
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| Transaction Entry | Select this check box to make this tax code available for AP disbursements, AP vouchers,
employee expenses, cash disbursements, cash receipts, invoices, and journal entries in
.
For a tax code to be available for cash receipts and invoices in the Transaction Center, you must set it up as both an input and output tax (with the Transaction Entry check box selected in the Inputs section) or set it up as an output only tax code. If you clear the Transaction Entry check box after you have selected it, and there is a tax code entered in any of the default tax code fields in various places in Deltek, you will receive an error. You must remove the default tax codes in these locations before you can clear the Transaction Center check box. The default tax codes are entered in the following locations:
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| Employee Expenses | Select this check box to make this tax code available for expense reports in
Time & Expense.
If you clear the Employee Expenses check box after you have selected it, and there are tax codes entered in the Default Tax Code grid on the Expense Report Categories form in , you will receive an error. You must remove the tax codes that are entered on the Expense Report Categories form before you can clear the Employee Expense check box. |
| Field | Description |
|---|---|
| Account | This field is enabled only if you select one of the check boxes in the Inputs section. Click
Search, and from the
Account lookup select a general ledger
account (typically a debit
account) for this tax code. The name of the
account displays below the
Account field.
You must enter an account in this field if any of the check boxes in the Outputs section are selected. Warning: If the input
account is missing for any tax code that requires it, you will not be able to post transactions.
This account is used when this tax code is applied for the type of entries that are associated with the check boxes (Available for Purchasing, Transaction Entry, and Employee Expenses) that you selected in this section. |
Non-Recoverable Tax Section
This section displays only if you enable the Tax Auditing feature on the Tax Auditing tab in .
This section applies if you need to account for both the recoverable and the non-recoverable portions of a tax (such as for the Canadian HST tax) or if you need to use a reverse charge tax.
Non-Recoverable Taxes
Non-recoverable taxes can be applied for AP vouchers, AP disbursements, cash disbursements, journal entries, and employee expenses in the Transaction Center and for expense reports in Time & Expense. These transactions can have more than one non-recoverable tax code applied.
A non-recoverable tax applies for input only taxes (tax codes that have no check boxes selected in the Outputs section). If you select a check box in the Outputs section or a Tax Applies To check box on the Intercompany Billing tab on the Tax Codes form, the Non-Recoverable Tax section is not enabled. Non-recoverable tax codes also do not apply for cash receipts, and you cannot enter them as a default tax code in a project's billing terms.
Non-recoverable taxes are calculated for a transaction and applied to the general ledger accounts when you post a transaction. The tax amounts are not displayed on the entry form in Deltek. You have the option to display both recoverable and non-recoverable tax amounts on the Tax Analysis report.
For more information, see the "Non-Recoverable Tax Examples" topic.
Reverse Charge Taxes
Reverse charge taxes apply for only AP voucher and AP disbursement transactions. These taxes are commonly used in the European Union Value Added Tax system.
| Field | Description |
|---|---|
| Rate | If this tax code has a non-recoverable tax portion, enter the non-recoverable rate for this tax. For example, if the rate is 8%, enter 8 (not .08). The percentage that you enter is applied to the net amount of a transaction center expense when the tax code is applied.
Example: A tax code has a rate of 13% and a non-recoverable rate of 8%. The tax calculation would be 13% of the net amount of the transaction center expense. The non-recoverable tax calculation would be 8% of the net amount of the same transaction center expense. For more detailed examples, see the "Non-Recoverable Tax Examples" topic. If this tax code is for a reverse charge tax and you selected the Reverse Charge Tax check box, the Rate field is not enabled. It prefills with the rate that you entered in the Rate field at the top of the Tax Codes tab. |
| Reverse Charge Tax | This check box is enabled only when you select the
Transaction Entry check box in the Inputs section of this tab and no other check boxes in the Inputs section and the Outputs section.
Select this check box if the tax code is a reverse charge tax, such as for the European Union Value Added Tax system. With a reverse charge tax, the buyer of a good or service is responsible for recording a VAT transaction. When you select this check box:
Do not set up a reverse charge tax as a default tax. If you do, the tax code will also be applied for cash disbursement and employee expense transaction. |
| Debit | Enter the debit information in these fields for either the non-recoverable portion of the tax or for the reverse charge tax if this is a reverse charge tax. If this is a reverse charge tax and you do not enter a debit
account in this field, the
account that is entered in the transaction will be used for the reverse charge tax.
Account Click
Project Click
Phase Click
Task Click
|
| Credit | Enter the credit information in these fields for either the non-recoverable portion of the tax or for the reverse charge tax if this is a reverse charge tax.
Account Click
Project Click
Phase Click
Task Click
|
in this field to open the
Account lookup, and select the
account number for the debit.