Tax Calculation overview

Tax Calculation helps automate and simplify the tax determination and calculation process. The tax engine is fully configurable. The elements that can be configured include, but aren't limited to, the taxable data model, tax code, tax applicability matrix, and tax calculation formula.

Tax Calculation is a highly scalable tax engine that's designed to support you in performing the following tasks:

• Automatically determine the correct sales tax group, item sales tax group, and tax codes through an enhanced determination mechanism.
• Support multiple tax registration numbers in one legal entity, and automatically determine the correct tax registration number on taxable transactions.
• Support tax determination, calculation, posting, and settlement for transfer orders.
• Define configurable tax calculation formulas and conditions for your specific business requirements.
• Share the tax determination and calculation solution across legal entities to save maintenance effort and avoid errors.
• Support customer and vendor tax registration number determination.
• Support list code determination.
• Support tax calculation parameters at the tax jurisdiction level.

For more information, see Get started with tax service.

Versions

We recommend that you import and set up your Tax Calculation configuration with the version that matches your Microsoft Dynamics 365 Finance or Microsoft Dynamics 365 Supply Chain Management version.

Finance or Supply Chain Management version	Tax configuration version
10.0.43	Tax Calculation Configuration 44.70.262
10.0.42	Tax Calculation Configuration 44.70.262
10.0.41	Tax Calculation Configuration 43.68.254
10.0.40	Tax Calculation Configuration 43.68.254
10.0.39	Tax Calculation Configuration 40.65.249
10.0.38	Tax Calculation Configuration 40.61.246

Data flow

Here is an outline of the data flow process for Tax Calculation.

1. In the Globalization Studio workspace in Finance, view and import taxable document model configurations and model mapping configurations. If you must extend configurations for an advanced scenario, see Add data fields in tax configurations.
2. In the Globalization Studio workspace in Finance, create or maintain tax features. You can use tax features to maintain tax rates and tax applicability rules.
3. After the tax feature setup is finalized, change the Feature version status to Completed.
4. In Tax calculation parameters, select which tax feature setup version to use for a specific legal entity.
5. In Finance and Supply Chain Management, operate transactions as usual. When Tax Calculation is needed, the client collects information from the transaction, such as the sales order or purchase order, and packages the information as payload. A request is then sent to calculate the tax.
6. The tax calculation request is received from the client and the calculation is completed. The tax result is then returned to the client.
7. The Dynamics 365 client receives the tax result and presents the tax calculation result on a sales tax page.

Supported transactions

Tax Calculation can be enabled by transactions.

The following table lists the transactions supported in the corresponding version.

Version	Transactions
10.0.43	Customer advance invoice Vendor advance invoice Interest note Collection letter
10.0.42	Slip journal (Cash) [ITA] Customs declaration journal
10.0.41	Write-off journal Prepayment customer invoice (Sales order)
10.0.40	[POL] Single Administrative Document (SAD)
10.0.39	Prepayment handling
10.0.38	Project invoice proposal Journals (Hour/Expense/Item/Fee) Project quotations Intercompany customer invoice Microsoft Dynamics 365 Project Operations integration journal
10.0.36	Invoice register Invoice approval Invoice pool
10.0.29	Periodic journals
10.0.28	Vendor payment journal Customer payment journal
10.0.26	General journals Vendor invoice journal
10.0.23	Free text invoice
10.0.21	Sales Sales quotation Sales order Confirmation Picking list Packing slip Sales invoice Credit note Return order Header miscellaneous charge Line miscellaneous charge Purchase Purchase order Confirmation Receipts list Product receipt Purchase invoice Header miscellaneous charge Line miscellaneous charge Credit note Return order Purchase requisition Purchase requisition line miscellaneous charge Request for quotation Request for quotation header miscellaneous charge Request for quotation line miscellaneous charge Inventory Transfer order – ship Transfer order – receive

Supported countries/regions

Tax Calculation can be run with supported localization features. The following table lists the countries/regions for a legal entity's primary address.

Version	Country/region
10.0.26	China Czech Republic Spain
10.0.24	Mexico
10.0.23	Thailand Japan Malaysia Singapore Indonesia
10.0.22	Australia Bahrain Canada Egypt Hong Kong SAR Kuwait New Zealand Oman Qatar Saudi Arabic South Africa United Arab Emirates
10.0.21	Austria Belgium Denmark Estonia Finland France Germany Hungary Iceland Ireland Italy Latvia Lithuania Netherlands Norway Poland Sweden Switzerland United Kingdom United States

Note

For any country/region not localized by Microsoft, Tax Calculation can also be enabled and run with other global features.

Related resources

Get started with tax service

Multiple VAT registration number

Tax feature support for transfer order

How to build extension in tax service