Configure Transaction Tax Rules for Countries

Create Value Added Tax (VAT) or Goods and Services Tax (GST) groups.

Create transaction tax statuses.

(Optional) Create tax rule exception groups.

Security: Set Up: Tax
domain in the Common Financial Management functional area.

For each country and its regions, you can specify the default tax code and tax applicability. Workday automatically populates this information onto spend and revenue transaction lines that meet the rule criteria. You can also create transaction tax rules for countries for VAT or GST groups and exception groups.

Access the

Create Transaction Tax Rule for Country

task.

Select the

Country

that the transaction tax rule applies to.

To determine the country rule that applies to a purchase or revenue transaction, Workday uses the ship-to address on the supplier or customer invoice. For expense transactions, Workday uses the travel country on the expense line or travel country preference on the employee profile.

Workday uses the transaction tax rule when the

Country

you select matches the:

Ship-to address on supplier or customer invoices for purchase and revenue transactions.

Travel country on expense lines for expense transactions.

Travel country preference on the employee profile for expense transactions.

Select the type of transaction tax rule that you want to create:

VAT Group

: Select to create a rule for companies in the same country that qualify for special consolidated VAT or GST filing and exemptions. You can use these rules for direct intercompany transactions. Workday uses this rule based on whether the company and intercompany company are within the same VAT or GST group.

Exception Group

: Select to create rules for transactions where the ship-to country isn't the correct country of taxation.

None of the Above

: Use this default for standard tax rules for countries.

As you complete the task, consider:

Option	Description
Company	You can select multiple companies to create a rule that addresses scenarios for recoverability percentages.
Transaction Tax Status	You can match on transaction tax statuses for company, customer, or supplier based on the country.

Select the region of a country such as

State

Territory

, or

Province

for defining a tax rule.

When defining country rules for expense items, leave country region and

Postal Code Range

blank.

As you complete the task, consider:

Option	Description
Postal Code Range Start	To have Workday automatically populate the tax code to all transactions whose ship-to address is within that jurisdiction, leave blank. When defining country rules for expense items, leave country region and Postal Code Range blank.
Postal Code Range End	To have Workday automatically populate the tax code to all transactions whose ship-to address is within that jurisdiction, leave blank. When defining country rules for expense items, leave country region and Postal Code Range blank.
Default Tax Applicability	Select to have Workday automatically populate the tax applicability on the spend or revenue transaction lines that meet this rule line criteria.
Default Tax Code	Select to have Workday automatically populate the tax code on the spend or revenue transaction lines that meet this rule line criteria.
Default Tax Recoverability	Select the tax recoverability for the selected tax rates in the Default Tax Code.
Default Tax Option	Select the default tax option that Workday populates on spend transaction lines that meet the criteria for this rule.
Tax Rule for Spend Items	Select a tax rule for spend items to have Workday evaluate the items within the transaction.
Tax Rule for Revenue Items	Select a tax rule for revenue items to have Workday evaluate the items within the transaction.

You can configure transaction tax rule exceptions.

Configure Transaction Tax Rules for Items

Configure Transaction Tax Rules Using Worktags