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Last Updated: 2023-06-23
Example: Set Up Third-Party Tax for Customer Invoices

Example: Set Up Third-Party Tax for Customer Invoices

This example illustrates how to configure Workday when you use a third-party tax service integration to populate the tax details on customer invoices.
Your company, Global Modern Services, Inc. (USA), uses a third-party tax service provider to import tax details onto your customer invoices.
Your third-party tax service provider maintains 3 different tax rates for city, county, and state tax.
To import the tax details from the third-party tax service provider onto your customer invoices, you:
  • Enable your company for third-party tax on customer invoices.
  • Configure a tax category for the third-party tax rates.
  • Configure 3 empty tax rates as a placeholder to store the taxes that your third-party tax service provider imports into Workday.
  • Group these 3 tax rates into 1 tax code that your third-party tax service provider references.
  • Set up a
    Third-Party Tax Service
     integration, following the instructions from your third-party tax service provider.
  • Add the third-party tax service integration as a step on the
    Customer Invoice
     business process.
  • Create a tax authority that you name
    Tax Authority
    .
  • Security:
    • Set Up: Tax
       domain in the Common Financial Management functional area.
    • Business Process Administration
       domain in the System functional area.
  1. Access the
    Edit Company Tax Details
  2. Select the
    Global Modern Services, Inc. (USA)
     task to enable option from the
    Company
     prompt.
  3. Click
    OK
    .
  4. On the
    Third-Party Tax Options
     tab, add a new row with these values:
    Operational Transaction Source
    Tax Service Name
    Enabled
    Customer Invoice
    Third-Party Tax Service
    Select the check box.
  5. Click
    OK
    .
  6. Access the
    Maintain Tax Categories
     task.
  7. Add a new row, and configure these options to create a third-party tax category:
    Tax Category Name
    Use Third-Party Tax Service
    Third-Party Tax Category
    Select the check box.
  8. Click
    OK
     and
    Done
    .
  9. Access the
    Create Transaction Tax Rate
     task.
  10. Configure these options to create an empty tax rate for the third-party city tax rate:
    Field
    Value
    Country
    United States of America
    Tax Rate Name
    Third-Party City Tax Rate
    Tax Authority
    Tax Authority
    Transaction Tax Category
    Third-Party Tax Category
  11. Click
    OK
     and
    Done
    .
  12. Access the
    Create Transaction Tax Rate
     task.
  13. Configure these options to create an empty tax rate for the third-party county tax rate:
    Field
    Value
    Country
    United States of America
    Tax Rate Name
    Third-Party County Tax Rate
    Tax Authority
    Tax Authority
    Transaction Tax Category
    Third-Party Tax Category
  14. Click
    OK
     and
    Done
    .
  15. Access the
    Create Transaction Tax Rate
     task.
  16. Configure these options to create an empty tax rate for the third-party state tax rate:
    Field
    Value
    Country
    United States of America
    Tax Rate Name
    Third-Party State Tax Rate
    Tax Authority
    Tax Authority
    Transaction Tax Category
    Third-Party Tax Category
  17. Click
    OK
     and
    Done
    .
  18. Access the
    Maintain Transaction Tax Codes
     task.
  19. Add a new row, and configure these options to create a third-party tax code:
    Tax Code Name
    Country
    Tax Rate
    US Third-Party Tax Code
    United States of America
    Select these 3 tax rates:
    • Third-Party City Tax Rate
    • Third-Party County Tax Rate
    • Third-Party State Tax Rate
  20. Click
    OK
    .
  21. Verify that you've correctly configured your
    US Third-Party Tax Code
    .
    The
    Tax Code Rate Total
     percentage for third-party taxes displays as zero.
  22. Click
    Done
    .
When you create a customer invoice for
Global Modern Services, Inc. (USA)
, leave the tax code and tax applicability fields empty. When you submit the customer invoice, Workday starts your third-party tax integration, which imports the tax details onto your customer invoice. You can view the tax amounts on the
Tax
 tab of the customer invoice and drill down to the line level.