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Administrator Guide
Last Updated: 2023-06-23
Steps: Configure Transaction Tax Rules

Steps: Configure Transaction Tax Rules

Security: These domains in the Common Financial Management functional area:
  • Set Up: Company General
  • Set Up: Tax
When you configure transaction tax rules, Workday automatically populates the appropriate tax code and tax applicability when you enter taxable documents.
  1. Access the
    Maintain Transaction Tax Item Groups
     task.
    Create groups to:
    • Organize purchase, expense, and sales items.
    • Use as dimensions in transaction tax rules for items.
    When you assign items to a group, you can include only items of the selected type. In transaction tax rules for items, you can use:
    • Sales item groups for revenue rules.
    • Purchase item and expense item groups for spend rules.
  2. Access the
    Assign Items to Transaction Tax Item Group
    task.
  3. Access the
    Maintain VAT or GST Groups
     task.
    Create groups to:
    • Organize companies that share the same Value Added Tax (VAT) or Goods and Services Tax (GST) requirements.
    • Use as dimensions in transaction tax rules for countries.
  4. Access the
    Assign Companies to VAT or GST Group
     task.
    Add 2 or more companies to a group. Use effective dates to track changes to the group over time.
  5. Access the
    Maintain Transaction Tax Statuses
     task.
    Create transaction tax statuses for a country, such as
    EU Company VAT Registered
     or
    EU Company Exempt
    . You can associate these tax statuses with companies, customers, and suppliers. You can then use them as a dimension in transaction tax rules for countries.
  6. Access the
    Edit Company Tax Details
     task.
    Configure transaction tax statuses by company to use as matching criteria in transaction tax rules for countries.
    As you complete the
    Tax Statuses
     tab, consider:
    Option Description
    Country
    Select a country to associate with a specific tax status for the company. You can only select 1 transaction tax status per country.
    Transaction Tax Status
    Select the appropriate tax status that applies to the company.
  7. You can assign
    Tax Statuses
     by country to a supplier to populate tax information automatically.
  8. You can assign
    Tax Statuses
     by country to a customer to populate tax information automatically.
  9. Access the
    Maintain Tax Rule Exception Groups
     task.
    Create a group to enable exceptions for a ship-to country with tax rules different from the shipping country. You can use these exception groups to create tax rules for a country and tax rule exceptions for ship-to countries.
  10. Configure tax exception rules for countries and items to determine if the place of supply country should be different than the ship-to address country on an invoice. The ship-to address country on an invoice is usually the place of supply, but you may need to override this when the billing company, supplier, or customer’s country should be the country for tax purposes.
  11. Configure exception rules to override the selection of transaction tax IDs for companies, customers, and suppliers on customer invoices and supplier invoices.
  12. Create a transaction tax rule for each country where you file a tax declaration.
  13. 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.
  14. Configure 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.
Workday evaluates transaction tax rules in this order:
  1. Transaction tax rules for countries based on VAT or GST groups. Only when it's a direct intercompany transaction and both companies are in the same VAT or GST group.
  2. Transaction tax rules for countries based on exception groups.
  3. General transaction tax rules for countries.
  4. Transaction tax rules for items.
  5. Transaction tax rules for worktags.
These rules override all other tax transaction rules.