Tax Codes—Exercises

IMPORTANT
It is extremely important that you set up and work within your own company to maintain your data integrity. If you work within any other company, your exercises will not function as intended and the data of other students might be affected. Predictable exercise results require that your data is isolated in your own company.

Main Exercises


Tax Codes

Purpose: The purpose of this exercise is to show you how to set up tax codes to be used for both supplier and customer invoices. 

Windows:
Tax Codes

  1. Open the Tax Codes window, and create a new record (F5).
  2. Enter the information shown in the table below.
Tax Code Tax Code Description Percentage Tax Type
0 No VAT 0 VAT
E0 No EU VAT 0 Calculated VAT
SE Swedish VAT 25% 25 VAT
UK UK VAT 20% 20 VAT
AZ Arizona Sales Tax 5 Sales Tax
IL Illinois Sales Tax 6 Sales Tax
ILU Illinois Use Tax 6 Use Tax
  1. You can enter the tax amount limit to be applied for a tax code (if applicable), in the Tax Amount Limit in Accounting Currency field. The amount entered in this field will be checked against the customer invoice lines using this tax code, and if the total tax amount for the invoice lines is within the specified limit, tax will not be posted for these invoice lines.
  2. Save the information (F12).


Withholding Tax Codes

Purpose: The purpose of this exercise is to show you how to set up tax codes to be used for tax withholding. 

Windows:
Tax Codes

  1. Open the Tax Codes window and create a tax code as mentioned in the above exercise.

  2. Make sure that you select Withheld Tax from the Tax Type list.

  3. Right-click on the record, and then click Tax Withholding to open the Tax Withholding window.

  4. Enter the information shown in the table below.
    Tax Code Tax Code Description Amount Not Taxable Minimum  Withheld Amount Currency Use Withholding Amount Table
    W1 Withholding 5% The base amount which should not be taxed Minimum amount to be withheld as withholding tax at a given point The accounting currency of the company. Selected if the tax withholding amount table should be used instead of the percentage

  5. Save the information (F12).