Tax Rates

These fields appear on the Tax Rates page for an MSP organization.

To configure tax rates for a country, click the country name (blue text), and configure the tax types and the states/provinces. To add a country to the list, click at the country list level, and then click . From the drop down, select the defined country name, and then click . You can also add legal entities (parent/child relationship) that allow the VMS to calculate VAT taxes for entities per location.

To add or remove a tax type, click , and form the drop down, select the type and then click . The type appears as a configurable column for your states/provinces. Click to edit the columns. To add a state/province, click .
Note: When add tax types are added to the States/Provinces List, the value defaults to '0'.
Section Description
Tax Types Drop down list of all configured tax types in the system. This list cannot be modified.
Tax System Determines the location of the tax authority for the entity. Select from the following:
  • Taxable Entity Location Billed for Services - Used for VAT tax calculation. Location of entity used to determine tax rates/s. Depending on location of entities, more than one location might be required for calculation.
  • Where Benefits are Received or Services are provided - Uses client or work location tax rate to determine taxes.
Conditions for No Tax Only displays if Tax System is set to 'Taxable Entity Location Billed for Services'. Select the applicable options:
  • Taxable Entities Cross Country Border
  • Bill From Taxable Entity is Not Registered

Tax calculation might produce zero taxes for numerous reasons. See the table below.
Zero Tax Reasons Customize the text when zero tax is generated. Only reasons that have the Display on Invoice Doc='true' can be customized.

See the table below.
State/Province List Drop down list of all configured states/provinces for a selected country.
Click a configured name to display the following information:
  • Subject to Taxes - Displays a list to tax types and the billing items that are assessed when calculating taxes for that state/province in the country. You can configure the billing types assessed by clicking , and then selecting the check boxes for the billing types for the configured tax types.
  • MSP Taxable Entity - Defines the taxable entity for the MSP organization in that country and state/province. See Add MSP Taxable Entity.
  • Tax Rates - Displays any local tax rates configured for the state/province. See Add Local Tax Rates.

Zero Tax Reasons

The following table describes the reasons why tax might be zero for a bill. Configuration errors can be corrected in the MSP, client, and supplier organization configuration settings.
Reason Displays on Invoice Description
Unknown MSP Entity No Configuration error. Unknown MSP taxable entity.
Unknown Client Entity No Configuration error. Unknown client taxable entity.
Unknown Supplier Registration No Configuration error. Unknown supplier registration for the country.
Unknown Billing Agreement No Configuration error. Unknown billing agreement for the supplier contract.
Unknown MSP State Taxes No Configuration error. State/Province of the MSP organization is not configured for taxes.
Unknown Client State Taxes No Configuration error. State/Province of the client organization is not configured for taxes.
Unknown Supplier State Taxes No Configuration error. State/Province of the supplier organization is not configured for taxes.
Bill From Exempt Yes Not a configuration error. Zero tax; bill from an exempt tax organization.
Bill To Exempt Yes Not a configuration error. Zero tax; bill to an exempt tax organization.
Cross Border Yes Not a configuration error. Zero tax; bill crosses borders.
Not Registered Yes Not a configuration error. Zero tax; bill form unregistered organization.