Rates and Fees

Determination tax data includes rates and fees for each tax authority. These rates and fees are applied to documents using one or more tax rules. You can add custom rates, fees, and rules to either standard or custom authorities to meet your specific business requirements.

A tax rule can point directly to a rate code, or it can point to a rate set that maps a material list or product to a rate code found in the set. In either case, based on the rule, only one rate code per authority is applied.

Rate and Fee Types: Basic, Tiered, and Graduated

You can specify basic, graduated, and tiered rates or fees.

• A basic rate is a percentage applied to the taxable amount of a transaction. Optionally, a basic rate can apply a minimum amount.
• A basic fee is a specific amount applied to a transaction. A fee may be constant (regardless of quantity) or may be multiplied by the quantity of the item.
• Graduated rates or fees can be applied to a transaction depending on the invoice amount, item amount, or quantity. A single rate or fee is applied based on the total amount. For example, 99 widgets could be taxed at 3%, while 500 widgets could be taxed at 2%.
• Tiered rates can be applied to portions of a transaction (based on invoice amount, item amount, or quantity) so that they are taxed at different rates. For example, widgets 1-99 could be taxed at 3%, 100-499 at 2.5%, and items 500+ at 2%.

Currency Conversions

Currency conversions are required to evaluate invoice amount, item amount, or quantity tiers, if transaction data specifies a different document currency than is specified by the rate or fee.

For example, if a transaction indicates an amount of 500 Swiss Francs and the associated tiered rate based on amount indicates a currency of euros, Determination will convert currencies before selecting the correct tier. If a conversion cannot be performed, the transaction generates a severe error.