Tax Calculation via Jurisdiction Code 

Purpose

Integration of the calculation (based on location) of taxes in the Real Estate Management component.

Taxes can be calculated on a local level and not just on a national level as is the case in the USA or Canada

This extension is based on the financial accounting component where the location is coded in the form of the jurisdiction code for the purposes of tax calculation. In the jurisdiction codes the definition of the tax percentage rate can also be time dependent.

You find additional information about the types of tax collection in the documentation for the Financial Accounting (FI) component: Types of tax collection.

You can assign jurisdiction codes to the following objects:

Prerequisites

In the Financial Accounting Customizing, you implement the corresponding activities for the sales tax:

Manual maintenance of the percentage rates for each jurisdiction code or

Management of percentage rates for each jurisdiction code via RFC (Remote Function Call) with external companies (Vertex, Taxware etc.).

Process Flow

  1. Set the method of tax accounting in the Financial Accounting Customizing
  2. Maintain the jurisdiction codes in the required master records in RE:

Real Estate objects

Lease-out

Management contract

The assignment of the codes is based on a hierarchical concept: If there is no jurisdiction code for an object (e.g. rental unit), the code of the superior object is used (e.g. the code of the building; if this is not available the business entity is used)

You can set a jurisdiction code for each condition type, if required.

If this code is not entered, the rental unit or the superior object is used for the calculating the code.

You can maintain two codes for each fee type for management contracts:

  • One for posting to customer accounts
  • One for posting to vendor accounts in the object company code.

Pay attention to the F1 Help for the indicator NFA of the fee type.

Result

The taxes are calculated according to the percentage rates per jurisdiction code for every commercial operation that involves taxes.