Rounding Rules

The following rules control rounding in tax calculations:

  • Rounding is governed by rules and precisions on the Currency Rules and Currency Specs pages.
  • Each currency includes a Rounding Rule of Round, Floor, or Ceiling.
    • Round rounds values up or down as appropriate to the nearest integer specified by the currency's precision.
    • Floor always rounds down to the integer specified by the currency's precision.
    • Ceiling always rounds up to the integer specified by the currency's precision.
  • Amounts are rounded at the lowest level, then summed. Tax amounts are rounded first, then line amounts, then invoice amounts. The result is a sum of rounded values––not a rounded sum of un-rounded values.
  • Information about rounding is returned in the invoice-level Output XML, in the elements <ROUNDING_RULE> and <ROUNDING_PRECISION>.
  • ONESOURCE Indirect Tax Determination returns both rounded and un-rounded results for most amounts in the system (TAX_AMOUNT, etc). Individual transactions can turn off rounding in the results by setting the <IS_ROUNDING> invoice-level Input XML element to false. 

Line Level Rounding

The US rounding algorithm rounds at the line level (combination of all tax authorities) instead of rounding at the tax authority level. The combination of US tax authorities supported in US Tax Data that are applicable to the transaction are combined and applied against the total taxable amount. Rounding is performed on this calculation. The algorithm then calculates tax at each tax authority level for reporting purposes. If the calculation at each tax authority level does not match the combined calculation, it represents a rounding difference. Any resulting rounding differences are allocated to the tax authorities based on absolute values and, in the event of a tie, the remaining difference is allocated to the highest level tax authority.

Document Rounding

In some countries, companies are required or can elect to calculate taxes at the invoice, or document, level. Document level rounding enables ONESOURCE Indirect Tax Determination to calculate taxes at the document level to increase compliance with various rounding requirements such as EU and Asia Pacific.

Invoice (document) level rounding includes:

  • The ability to specify rounding at the document level.
  • The ability to select document level rounding by country.
  • Accurate calculation of taxes at document level through the selection of document level rounding, so that the sum of the taxes at line level equals the same total taxes as if originally calculated based on invoice total.
  • Messages returned in the Output XML stating whether document level rounding was applied.

Document rounding may also be set at the company level. For more information, see the Company Roles for Document Rounding option in Company Options.

In a rounding group, items are grouped by ERP tax code, rate, and direction (Input or Output). Direction is required, as shown in this example:

  • If the ERP Tax Code = 'FRVAT', Rate = 0.196, and Direction = O, the rounding group is "FRVAT0.196O".
  • If it is a custom authority with direction turned off, the rounding group is "FRVAT0.196".

    The option to turn on/off direction only applies to custom authorities of any type.

Document Rounding Exceptions

  • The US, its possessions, territories and protectorates, Canada, India, and Brazil are excluded from document rounding. The default line level rounding is applied to US transactions only.
  • Document level rounding is not applied to invoices with multiple taxing countries. The default line level rounding is applied to these transactions.
  • Tiered and graduated rates are not applicable to invoice level rounding. Line level rounding is applied to these transactions.
  • Document level rounding applies only to document level currency, not currency conversions.

For information about adding, modifying, or deleting a country from document level rounding, see Document Rounding.