(IND) Set up thresholds and concession certificates for tax calculations [AX 2012]

Updated: November 27, 2013

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2

After you create the threshold definitions and set up threshold hierarchies, you can set up thresholds and concession certificates for direct tax calculations. Microsoft Dynamics AX calculates direct taxes on transactions based on the threshold segments that you specify. Follow the steps in this topic to set up thresholds and concession certificates for direct tax calculation.

NoteNote

This topic does not apply to versions of Microsoft Dynamics AX 2012 prior to cumulative update 7 for AX 2012 R2.

The following illustration shows how setting up thresholds and concession certificates for direct tax calculation relates to threshold limits task.

For an overview of the process, see (IND) Tax thresholds and tax concession certificates.

Tax threshold and tax concession certificates

The following table shows the prerequisites that must be in place before you start.

Category

Prerequisite

Version

Microsoft Dynamics AX 2012 R2 with the hotfix in KB2850782

Country/region

The primary address for the legal entity must be in the following countries/regions: India

Related setup tasks

Use the Withholding tax codes form to set up a withholding tax code to use threshold limits. Use the Threshold references form to set up an entity to use a threshold, and then use the Threshold designer form to define the tax rates that apply to the final levels of the various hierarchy segments of the threshold.

To assign threshold and threshold values to a withholding tax code, follow these steps:

  1. Click General ledger > Setup > Withholding tax > Withholding tax codes.

  2. Select a withholding tax code that has a TDS or TCS tax type for which to apply the threshold.

    NoteNote

    If you specified values in the Value field in the Withholding tax values form for the withholding tax code, remove the values.

  3. Select the Apply threshold check box to apply threshold for the tax code.

  4. Click Threshold references to open the Threshold references form, where you can set up an entity to use a threshold by specifying the account type, account code, and threshold definition.

    Field

    Description

    Account type

    Select the type of account to which to apply the threshold.

    Select from the following options:

    • Customer – Apply the threshold to a customer account, a customer group, or all customers.

    • Vendor – Apply the threshold to a vendor account, a vendor group, or all vendors.

    • All – Apply the threshold to all customers and all vendors.

      NoteNote

      If you select this option, All is updated in the Account code field, and the Account code field is not available.

    Account code

    Select the account code for the selected account type.

    Select from the following options:

    • Table – Apply the threshold for a single customer account or vendor account.

    • Group – Apply the threshold for a customer group or vendor group.

    • All – Apply the threshold for all customers or all vendors.

    Account or group

    Select the customer account, customer group, vendor account, or vendor group that the threshold applies to. This field is determined by the selections in the Account type and Account code fields.

    NoteNote

    This field is available only if you select Table or Group in the Account code field.

    Threshold

    Select the threshold definition to apply to the account type, account code, and account or account groups that you selected.

    Select from the following options:

    • Cumulative – Apply the threshold segment to cumulative transaction values.

    • Per transaction – Apply the threshold segment to individual transaction values.

    • Per transaction line – Apply the threshold segment to individual transaction line values.

  5. After you set up the entity to use a threshold definition, click Threshold designer to open the Threshold designer form, where you can define the tax rates that apply to the final levels of the various hierarchy segments of the threshold.

  6. In the left pane, select a final level of a threshold segment, and then modify the effective dates, lower and upper limits, or type of threshold, if required.

    Field

    Description

    Effective from

    Modify the date from which the threshold values are effective.

    Effective to

    Modify the date until which the threshold values are effective.

    Lower limit

    Modify the starting point of the threshold segment.

    Upper limit

    Modify the ending point of the threshold segment.

    Type

    Modify the type of threshold to apply to the selected segment.

  7. In the right pane, on the Tax value FastTab, click New, and then set up a threshold value for the selected final level segment.

    Field

    Description

    Tax effective from

    Select the starting date from which the tax values are effective.

    Tax effective to

    Select the ending date until which the tax values are effective.

    PAN Status

    If the threshold applies to a vendor, a vendor group, or all vendors, select Not available or Received as the status of the Permanent Account Number (PAN) to apply the threshold to. For example, if you select Received in this field, the tax value will apply only to the vendors who have the PAN status set up as Received in the Vendors form.

    Alternatively, if the threshold applies to a customer, a customer group, or all customers, select Not applicable as the status of the PAN to apply the threshold to.

    Overlook threshold

    If you select the Overlook threshold check box in the Withholding tax groups form for the withholding tax code, select this check box to use the tax value.

    Value

    The percentage that is used to calculate direct taxes for the threshold segment.

    Reason code

    Enter the reason for a lower deduction or no deduction. This reason will be printed on the TDS or TCS statements and electronic file.

    Calculate tax

    Select Yes or No to indicate whether the direct tax is calculated for this value.

    Include in turnover base

    Select Yes or No to indicate whether to include the value of this transaction in the overall turnover base that will be used for other transactions.

    Calculate previously nontaxed transactions

    Select this check box to calculate direct tax on all previous taxable transactions for which taxes were not calculated.

  8. Repeat step 7 to set up additional values for the same threshold segment.

  9. Repeat steps 6 and 7 to set up values for additional threshold segments.

  10. Repeat steps 4 through 7 to set up additional entities to use the threshold.

You can click Referenced by to open the Threshold reference list form, where you can view the list of referencing entities that use the selected threshold.

If a customer or a vendor has a concession certificate, you can use the Withholding tax concessions form to set up the details of the tax concession certificate for the customer or vendor in Microsoft Dynamics AX. You can set up a tax concession certificate for a vendor only if you have set up the PAN status for the vendor as Received in the Status field on the Tax information FastTab in the Vendors form.

NoteNote

If you change the PAN status for a vendor from Received to Not available in the Status field on the Tax information FastTab in the Vendors form, the tax concession certificate that is available for the vendor will be deleted.

To set up a tax concession certificate for a customer or vendor, follow these steps:

  1. Click General ledger > Setup > Withholding tax > Withholding tax codes.

  2. Select a withholding tax code that has a TDS or TCS tax type for which threshold is applied.

  3. Click Threshold references to open the Threshold references form, and then select the threshold reference to set up the concession certificate for.

  4. Click Threshold designer to open the Threshold designer form, and then select a final level of a threshold segment to set up the concession certificate for.

  5. Click Concession certificate to open the Withholding tax concessions form.

    NoteNote

    The Concession certificate button is available only if you set up a customer or vendor account to use the threshold by specifying Customer or Vendor in the Account type field, Table in the Account code field, and a customer or vendor account in the Account or group field in the Threshold references form.

  6. In the Certificate number field, enter the number of the tax concession certificate that is received from the customer or vendor.

  7. In the From date and To date fields, specify the first and the last dates of the validity of the certificate.

  8. In the Effective cancellation date field, enter the date after which the certificate will no longer be used or will be canceled.

  9. In the Turnover threshold field, enter the maximum turnover amount up to which the certificate is applicable.

  10. Click OK.

  11. Repeat steps 4 through 10 to set up tax concession certificates for other segments, if required.

You have finished setting up tax thresholds and tax concession certificates for India. To set up withholding tax groups, and to create and post transactions that use thresholds, perform the following tasks:

  1. Set up a withholding tax group that contains the withholding tax codes to which you assigned thresholds and threshold values. For more information about how to set up a withholding tax group, see (IND) Withholding tax groups (modified form).

  2. Create and post transactions that use the withholding tax group for the withholding tax codes to which you assigned thresholds and threshold values. For more information about how to create and post transactions, see Calculate and post withholding tax and Enter a vendor payment that is subject to withholding tax.

If you don't have access to the pages that are used to complete this task, contact your system administrator and provide the information that is shown in the following table.

Category

Prerequisite

Configuration keys

No configuration key is required for this task.

Security roles and duties

To set up thresholds and concession certificates for tax calculations, you must be a member of a security role that includes the following duties:

  • Enable sales taxes process (TaxSalesTaxesProcessEnable)

  • Inquire into sales tax process reference data (TaxSalesTaxProcessReferenceDataInquire)

Security roles and privileges

To set up thresholds and concession certificates for tax calculations, you must be a member of a security role that includes the following privileges:

  • Maintain withholding tax codes (TaxWithholdTableMaintain)

  • View withholding tax codes (TaxWithholdTableView)


Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services (LCS).

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