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Administrator Guide
Last Updated: 2024-09-20
Configure Transaction Tax ID Exceptions

Configure Transaction Tax ID Exceptions

Security: These domains in the Common Financial Management functional area:
  • Set Up: Company General
  • Set Up: Tax
Configure exception rules to override the default selection of transaction tax IDs for companies, customers, and suppliers on customer invoices and supplier invoices. This ensures that Workday automatically populates the tax IDs that you specify on customer and supplier invoices.
  1. Access the
    Maintain Transaction Tax ID Exception Rules
     task.
  2. Select the:
    • Revenue
       tab to create tax ID exception rules for sales items.
    • Spend
       tab to create tax ID exception rules for purchase items.
  3. Create a tax ID exception rule.
    Workday processes rule lines on the invoice from the most specific rule to the least specific rule so you should order your revenue and spend tax ID exception rule lines accordingly. Workday processes:
    • The invoice header for the parties to the invoice.
    • The ship-to address for the country.
    • The invoice lines for the tax applicability.
    Workday applies the highest ordered rule that results in a match.
  4. As you complete the grid, consider:
    Option Description
    Company
    Supplier
    Select one or more companies or suppliers that the exception rule applies to on customer or supplier invoices.
    Statutory Invoice Type
    Select a country-specific statutory invoice if you use invoice types to categorize your invoices in compliance with government requirements.
    When you select a
    Company
    , the prompt only contains invoice types that you’ve configured for the country of that company.
    Ship-to-Country
    Select one or more countries that the exception rule applies to on a spend or revenue transaction. Workday uses the exception rule when the country or countries you select match the ship-to address on supplier or customer invoices.
    Ship-to-State/Region
    Select a ship-to state or region within the ship-to country. The ship-to state or region is only selectable if you select only one ship-to country.
    Logic for Company Tax ID Type
    Logic for Customer Tax ID Type
    Logic for Supplier Tax ID Type
    Select:
    • Default Behavior
       to return the default tax ID for the company, customer, or supplier.
    • Specific Tax ID Type
       to return the exception tax ID that you set up for the company, customer, or supplier.
    • Transaction Tax ID of Primary Business Address Country
       to return the tax ID for the primary business address of the company.
    • Transaction Tax ID of Ship-To Country
       to return the tax ID for the ship-to country of the company.
    When you select any option other than
    Default Behavior
    , and that option doesn't return a tax ID for the company, customer, or supplier, Workday returns the default tax ID.
    Company Tax ID Type Override
    Customer Tax ID Type Override
    Supplier Tax ID Type Override
    Select one of these options to choose the exception tax ID that you want to override the default tax ID.
Workday uses the tax ID exception rule on the invoice to return the correct tax ID on customer and supplier invoices.
A customer receives goods in Northern Ireland, which is part of the UK. The company that ships the goods is in France, which is an EU country. You have set up 2 UK tax IDs for the customer:
  • One for UK VAT, which is set as the transaction tax ID.
  • One for UK Northern Ireland VAT, which is not set as a transaction tax ID.
When Workday processes the customer invoice, the transaction tax ID that Workday normally returns for the customer is the UK VAT tax ID. You set up a transaction tax ID exception rule so that Workday returns the UK Northern Ireland VAT tax ID for the customer instead.
  • Create a transaction tax rule for each country where you file a tax declaration. See Configure Transaction Tax Rules for Countries.
  • Create transaction tax rules for revenue and spend items to be used in your transaction tax rules for country. By using the transaction tax item groups, one item rule line defaults for all purchase, sales, or expense items in the tax item group. See Configure Transaction Tax Rules for Items.
  • Create tax defaulting rules using worktags on document lines to enable Workday to populate transaction tax attributes at the line level on supplier invoices, purchase orders, and ad hoc payments. See Configure Transaction Tax Rules for Worktags.