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Administrator Guide
Last Updated: 2024-03-22
Set Up Tax Applicability for Financial Transactions

Set Up Tax Applicability for Financial Transactions

You can aid transaction entry and approval by assigning a default tax applicability to sales, purchase, and expense items. You can enable a tax applicability for use on spend transactions, revenue transactions, or both. You can also configure tax rules that specify an override tax applicability that automatically populates on transaction lines for specific items in specific countries. You can specify tax applicability on these types of transaction lines:
  • Accounting Journals
  • Ad Hoc Bank Transactions
  • Ad Hoc Payments
  • Cash Sales
  • Customer Contracts
  • Customer Invoices
  • Customer Invoice Adjustments
  • Down Payment Invoices
  • Expense Reports
  • Intercompany Contracts
  • Purchase Orders
  • P-Card Transactions
  • Requisitions
  • Supplier Contracts
  • Supplier Invoices
  • Supplier Invoice Adjustments
  • Supplier Invoice Requests
At transaction entry, you can filter tax applicability results by
Spend
,
Revenue
,
Inactive
 status, or by country on these types of transaction lines only:
  • Accounting Journals
  • Ad Hoc Bank Transactions
  • Ad Hoc Payments
  • Cash Sales
  • Customer Invoices
  • Customer Invoice Adjustments
  • Down Payment Invoices
  • Purchase Orders
  • P-Card Transactions
  • Requisitions
  • Supplier Contracts
  • Supplier Invoices
  • Supplier Invoice Adjustments
  • Supplier Invoice Requests
  1. Access the
    Maintain Tax Applicability
     task.
  2. As you complete the task, consider:
    Option Description
    Tax Applicability Code
    Enter a name for the tax applicability that displays for selection within transactions.
    Taxable
    Select to enable tax applicability when Workday calculates the tax amount on transactions.
    Spend
    Select to enable tax applicability to be used in spend transactions.
    Revenue
    Select to enable tax applicability to be used in revenue transactions.
    Country
    Select 1 or more countries to include the tax applicability in filter results for that country, on taxable transactions where filtering is available.
    Default Tax Recoverability
    Select an available tax recoverability that defaults to the tax recoverability on transactions.
    Inactive
    Select for any tax applicability that is no longer in use to prevent it being applied to configuration tasks and new transactions. When you make a tax applicability inactive, update all configuration tasks with default tax applicability for taxable documents to remove inactive tax applicability from the default setup. Inactive tax applicabilities are maintained on existing configuration assignments, transactions and still available for reporting.
You can use the
Tax Applicability
field on taxable transactions to filter tax applicabilities by:
  • Tax Applicability by Company's Country
  • Tax Applicability by Country
  • Tax Applicabilities
Workday uses the tax applicability and tax code on the transaction line to:
  • Calculate recoverable and nonrecoverable tax amounts for each tax rate within the tax code.
  • Segregate transactions for reporting.