Concept: Effective Dating for Transaction and Withholding Tax Rates
When you create new transaction or withholding
tax rates, you must specify an effective date. You can specify multiple effective dates
on a transaction or withholding tax rate.
Workday sets all tax rates created before the effective dating
feature release with the effective date of 1900-01-01.
When you configure multiple effective dates on a transaction or withholding tax rate, Workday
doesn't display the percentage (%) on the name of a:
- Transaction tax rate.
- Transaction tax code.
- Withholding tax rate.
For
transaction tax rates, Workday determines which tax rate percentage to apply based on
the transaction date.
Workday uses this date to determine the tax rate for the type
of operational transaction.
For withholding tax rates with a
Realization Point
of:- InvoiceorCustomer Invoice Self Withholding: Workday applies the tax rate percentage, threshold, and progressive rate tiers based on the effective date and the invoice date.
- Payment: Workday uses the payment date to determine which effective dated tax rate percentage, threshold, and progressive rate tiers to apply.
Example: Effective Dating a Transaction Tax Rate
Your local tax jurisdiction increases the transaction tax rate from 8% to 9% with the
effective date 2019-01-01.
You can use the
Edit Transaction
Tax Rate
task to configure a new effective date on the existing tax
rate.
Enter 2019-01-01 as the effective date with a tax rate
percentage of 9%. Workday uses 9% to calculate the tax rate for transactions after
2018-12-31 and 8% for transactions before 2019-01-01.