Currencies

Before you can convert currencies, you need to:

  • Define currencies for the system, company and authorities.
  • Specify currencies for authorities.
  • Specify the currency associated with fees.

Currency Definitions: System, Company, and Authority-Specific Definitions

The Currency Rules page has system-level currency definitions. These definitions include attributes you are likely to encounter in your transactions, such as ISO Code, Rounding Rules (round, ceiling or floor), currency precision, and the minimum accountable unit associated with each currency.

You can override these currency definitions in two places:

  • Use the Currency Specs page to override system-level currency behavior for one or more currencies.
  • Use the Authority Currency Specs page to override either of the other two currency definitions.

Specifying Authority Currencies

On the Authority Currency Specs page, in addition to overriding currency definitions at the authority level, you can specify which currencies are acceptable to the authority for reporting and remittance of tax calculations . You can also specify a single default currency when multiple currencies are acceptable.

Specifying Fee Currencies

Because fees can be based on invoice or item amounts, you should specify the currency associated with the fee when you configure it on the Rates and Fees page. The available currencies will be the list of currencies associated with the authority on the Authority Currency Specs page.

If a fee currency is specified, ONESOURCE Indirect Tax Determination performs needed currency conversions as part of the calculation. If no currency is specified, ONESOURCE Indirect Tax Determination defaults to a "Universal Currency" and does no conversions.

Currency Conversions

Once currencies are defined for the system, company, and authorities, conversions can take place.

  • The conversion process associates currencies between your ERP system and the taxing authority on a specific date.
  • You specify an exchange rate source or multiple sources.
  • You specify a currency exchange data provider.

Conversion Process

An ERP-generated document (such as an invoice or purchase order) may specify a different currency from the currency required by the taxing authority. If there is a mismatch between the currency stated on the document and that associated with the authority, currency conversion uses the available currency specs, date determination rules, and exchange rates:

  • Currency specs are evaluated at the authority, then company, and then system level.
  • By default, the currency conversion uses the movement or invoice date. This date is returned as the Tax Exchange Rate Date. However, a date determination rule for the taxing authority may specify that a different Tax Exchange Rate Date should be used instead of the default date. See Date Determination for more information.
  • Conversions require a valid Exchange Rate as described in the following section.

The document and authority amounts for all amounts generated by the transaction are calculated and returned in rounded and un-rounded amounts. In this way, your ERP system can use any of these four amount types to populate documents, and Determination audit data contains the required data to generate compliance and other reports in either the document or authority currency.

Exchange Rate Sources and Exchange Rates

ONESOURCE Indirect Tax Determination does not maintain system-level exchange rate data. You must maintain your own Exchange Rates data, by either uploading a CSV file containing the rates, specifying a Java rate source, or entering the rates directly.

Exchange rates are contained in one or more collections of related exchange rates called Exchange Rate Sources. You may specify a single rate source, or multiple rate sources based on update dates, geographies, or other considerations specific to your environment.

Once you configure your exchange rates and exchange rate sources, you can associate them with your Currency Specs and Authority Currency Specs.

Currency Exchange Data Providers

Your company can serve as its own Currency Exchange Data Provider or inherit this data from another company. On your company's Tax Preferences page, you can specify a different Currency Exchange Data Provider for both US and international transactions.