<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tc/onlinemanual/000316" xml:lang="en">
   <Header>
      <Title>To define default tax codes</Title>
      <Keyword type="header" order="d1e1445106">
         <Level1>tax codes</Level1>
         <Level2>default</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1445111">
         <Level1>tax codes</Level1>
         <Level2>EU VAT</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>In many countries, different tax rates apply to transactions
		within the country and transactions across country borders. In addition,
		special tax rules can apply to freight invoices.</Paragraph>
      <ProcedureList>
         <ListIntro>To define the default tax codes for the various types of
		  transactions, take the following steps:</ListIntro>
         <ListItem>Set up the tax codes as
		  described in <Link href="/baanerp/tc/onlinemanual/000031" role="manual">Setting up tax registration</Link>. You must define
		  a tax code for each tax rate in each country.</ListItem>
         <ListItem>
            <Paragraph>In the <GUIRef href="/baanerp/tc/tax/tctax0138m000" role="session">Tax Handling (tctax0138m000)</GUIRef> session, specify the default tax codes in each
			 country. If a tax code applies to a specific item, you must specify the item. ERP Enterprise applies the tax codes
			 with an empty <GUIRef href="/baanerp/tc/tax/tctax0138m000#tctax038.item" role="manual">Item</GUIRef> field to all the items for which you do not
			 define specific tax codes.</Paragraph>
            <Paragraph>For <Emphasis>domestic tax,</Emphasis> the search path for
			 the tax code includes the tax codes of the item data. For more information, refer to <Link href="/baanerp/tc/onlinemanual/000316#item_domestic" role="manual">Item tax codes for domestic tax</Link>.</Paragraph>
         </ListItem>
      </ProcedureList>
      <List>
         <ListIntro>You can define default tax codes for the following types of
		  tax:</ListIntro>
         <ListItem> 
            <Link href="/baanerp/tc/glossary/glossary#000339" role="glossary">Domestic VAT</Link>
         </ListItem>
         <ListItem> 
            <Link href="/baanerp/tc/glossary/glossary#000342" role="glossary">Import VAT</Link>
         </ListItem>
         <ListItem> 
            <Link href="/baanerp/tc/glossary/glossary#000343" role="glossary">Export VAT</Link>
         </ListItem>
         <ListItem>
            <Link href="/baanerp/tc/glossary/glossary#000423" role="glossary">Own goods movement</Link>
         </ListItem>
         <ListItem>
            <Link href="/baanerp/tc/glossary/glossary#000413" role="glossary">Triangular trade</Link>
         </ListItem>
      </List>
      <GeneralSection ID="item_domestic">
         <SectionTitle>Item tax codes for domestic tax</SectionTitle>
         <List>
            <ListIntro>For <Link href="/baanerp/tc/glossary/glossary#000339" role="glossary">domestic tax</Link>, you can also link default tax codes to
			 items or item groups in the following sessions:</ListIntro>
            <ListItem> 
               <GUIRef href="/baanerp/td/isa/tdisa0501m000" role="session">Items - Sales (tdisa0501m000)</GUIRef>.</ListItem>
            <ListItem> 
               <GUIRef href="/baanerp/td/ipu/tdipu0101m000" role="session">Items - Purchase (tdipu0101m000)</GUIRef>.</ListItem>
            <ListItem> 
               <GUIRef href="/baanerp/td/isa/tdisa0102s000" role="session">Item - Sales Defaults (tdisa0102s000)</GUIRef>.</ListItem>
            <ListItem> 
               <GUIRef href="/baanerp/td/ipu/tdipu0102m000" role="session">Items - Purchase Defaults (tdipu0102m000)</GUIRef>.</ListItem>
         </List>
         <Paragraph>ERP Enterprise uses
		  these tax codes if you do not define a specific <Link href="/baanerp/tc/glossary/glossary#000339" role="glossary">domestic tax</Link> code for the item in the <GUIRef href="/baanerp/tc/tax/tctax0138m000" role="session">Tax Handling (tctax0138m000)</GUIRef> session.</Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>Default EU VAT codes</SectionTitle>
         <Paragraph>If your company's home country is a member of the European
		  Union, you must define specific tax codes for import and export to other EU
		  countries. Special tax rules apply to freight invoices.</Paragraph>
         <List>
            <ListIntro>You can define the following default EU tax codes:</ListIntro>
            <ListItem> 
               <Link href="/baanerp/tc/glossary/glossary#000340" role="glossary">Intracommunautair transactions (ICT Sales VAT)</Link>
            </ListItem>
            <ListItem> 
               <Link href="/baanerp/tc/glossary/glossary#000341" role="glossary">Intracommunautair transactions (ICT Purchase VAT)</Link>
            </ListItem>
            <ListItem>
               <GUIRef href="/baanerp/tc/tax/tctax0138m000#f.fics.dsca" role="manual">Freight ICT Sales</GUIRef>
            </ListItem>
            <ListItem>
               <GUIRef href="/baanerp/tc/tax/tctax0138m000#tctax038.ficp" role="manual">Freight ICT Purchase</GUIRef>
            </ListItem>
         </List>
         <List>
            <ListIntro>ERP Enterprise uses the VAT codes for intra-EU transactions if the following is true:</ListIntro>
            <ListItem>The business partners
			 involved are legal persons, in other words, the business partners have a <Link href="/baanerp/tc/glossary/glossary#000336" role="glossary">tax number</Link> in the country
			 concerned.</ListItem>
            <ListItem>The transactions are
			 posted to financial companies that reside in EU countries.</ListItem>
         </List>
         <List>
            <ListIntro>The tax rates for intra-EU transactions apply to the
			 following transaction types:</ListIntro>
            <ListItem>Sales transactions and
			 purchase transactions between your company and external business partners.</ListItem>
            <ListItem>Sales transactions and
			 purchase transactions between <Link href="/baanerp/tc/glossary/glossary#AffiliCompan_tc" role="glossary">affiliated-company</Link> business
			 partners.</ListItem>
         </List>
         <Note>
            <SectionTitle>Note</SectionTitle>
            <Paragraph>ERP Enterprise uses the country that you selected for the
			 company in the <GUIRef href="/baanerp/tc/com/tccom0102s000" role="session">General Company Data (tccom0102s000)</GUIRef> session to
			 determine whether or not the company resides in an EU member country.</Paragraph>
         </Note>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>Default tax codes for financial transactions</SectionTitle>
         <Paragraph>For transactions that you create in <GUIRef href="/baanerp/tf" role="package">Financials</GUIRef>, you can link a
		  default tax code to a ledger account.</Paragraph>
         <Paragraph>In the <GUIRef href="/baanerp/tf/gld/tfgld0508m000" role="session">Chart of Accounts (tfgld0508m000)</GUIRef> session, select the default tax code in the <GUIRef href="/baanerp/tf/gld/tfgld0508m000#tfgld008.cvat" role="manual">Default Tax Code</GUIRef> field. For example, this is the
		  default tax code for journal vouchers that you create for the ledger account.</Paragraph>
      </GeneralSection>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000317" role="manual">Value added tax (VAT)</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000031" role="manual">Setting up tax registration</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>