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Administrator Guide
Last Updated: 2024-09-20
Configure Transaction Tax Rules for Countries

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.
  1. Access the
    Create Transaction Tax Rule for Country
     task.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
    Classification
    Select
    Goods
     or
    Services
     so that Workday will automatically populate tax attributes, with items or categories classified as either goods or services on spend or revenue transaction lines.
    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 Point Date Type
    Select the default tax point date type to populate on spend transaction lines.
    Transaction Date
     is invalid on spend transaction lines. When you select
    Transaction Date
    , Workday instead populates the
    Invoice/Adjustment Date
     or, when VAT on payment is enabled for the company, the
    Payment Date
    .
    When you select
    Goods/Services Delivery Date
    , Workday doesn't populate this date on supplier invoices created using web services. Since a tax point date is required for
    Goods/Services Delivery Date
    , and invoices created using web services can be approved automatically, Workday doesn't populate the
    Goods/Services Delivery Date
     to prevent the creation of bad data.
    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.