SuiteTax Latam Engine Tax Determination Process

Note:

To access the SuiteTax Latam Engine SuiteApp documentation in other languages, do the following:

To access the documentation in Brazilian Portuguese (Português do Brasil), see SuiteTax Latam Engine.
To access the documentation in Spanish, select Español (Latinoamérica) from the dropdown list at the top right corner of the NetSuite Help Center.

The SuiteTax Latam Engine enables you to use different plug-ins to calculate taxes on transactions. For each sale or purchase transaction, NetSuite determines which tax determination rules to apply. Then, the system triggers the appropriate plug-in implementation to calculate the tax amounts.

Tax Determination and Calculation

The tax determination process starts when you click Save or Preview Tax in a transaction. NetSuite gathers information from the transaction to identify tax determination rules records that match the provided information.

After it determines the eligible rules, the system uses the item code and operation code to identify which of those rules apply to each item in the transaction. Multiple tax determination rules can apply to the same item, and the rules can have several associated tax codes.

If NetSuite finds rules that have parent tax determination rules, SuiteTax Latam Engine first calculates the taxes from tax determination rules without parents. Then, the tax engine calculates the taxes from the rules with parents.

This order ensures the parent is calculated before the child. The hierarchy established through tax determination rules parent/child relationships can be leveraged to consider or not a given tax amount on another tax's calculation basis, for example. The hierarchy of rules can have multiple levels.

To calculate the appropriate taxes, NetSuite triggers the plug-in implementations associated with the tax codes records. The plug-in implementation must be prepared to handle the particularities of each tax's calculation, such as adding or removing amounts from tax calculation basis.

After the calculation, NetSuite displays the tax amounts on the transaction’s Tax Details subtab and Summary box.

If NetSuite does not find any applicable tax determination rules, the system does not calculate taxes and displays an error message.

The following diagram summarizes SuiteTax Latam Engine's tax determination process:

Transaction and Tax Determination Rules Fields Matching

The SuiteTax Latam Engine uses the following fields to gather the information needed to match a transaction with the eligible tax determination rules:

Transaction Type	Transaction Field	Tax Determination Rules Field
Purchase Transactions	Item	Under General Information: Item Code
Subsidiary	Under General Information: Subsidiary Under Receiver Information: City State Country Line of Business Tax Regime
Vendor	Under Issuer Information: City State Country Line of Business Tax Regime
Operation Code	Under General Information: Operation Code
Sales Transactions	Item	Under General Information: Item Code
Subsidiary	Under General Information: Subsidiary Under Issuer Information: City State Country Line of Business Tax Regime
Customer or Customer/Project	Under Receiver Information: City State Country Line of Business Tax Regime
Operation Code	Under General Information: Operation Code

Transaction Type

Transaction Field

Tax Determination Rules Field

Purchase Transactions

Item

Under General Information:

Item Code

Subsidiary

Under General Information:

Subsidiary

Under Receiver Information:

City
State
Country
Line of Business
Tax Regime

Vendor

Under Issuer Information:

City
State
Country
Line of Business
Tax Regime

Operation Code

Under General Information:

Operation Code

Sales Transactions

Item

Under General Information:

Item Code

Subsidiary

Under General Information:

Subsidiary

Under Issuer Information:

City
State
Country
Line of Business
Tax Regime

Customer

Customer/Project

Under Receiver Information:

City
State
Country
Line of Business
Tax Regime

Operation Code

Under General Information:

Operation Code

Note:

The SuiteTax Latam Engine uses the customer or vendor’s default shipping address to determine their country, state and city. If you want to use a different address in a specific transaction, click the Shipping subtab and select another address.

Additional Properties for Tax Calculation

For more specific tax scenarios, the SuiteTax Latam Engine provides the plug-in implementation with additional properties that the plug-in can use to calculate tax amounts:

Amount and net amount – The SuiteTax Latam Engine provides the plug-in implementation with both the amount and net amount of each line item. The net amount considers the discounts applied to items or the entire transaction.

The plug-in implementation can use either the amount or net amount to comply with tax regulations.
Shipping and handling costs – If shipping or handling costs apply to the transaction, the SuiteApp provides the plug-in implementation with their total and proportional amounts. To obtain the proportional amount, NetSuite divides the individual amount of each line item by the sum of all the items. Then, the system multiplies it by the total shipping or handling amounts.

By default, the SuiteTax Latam Engine does not consider shipping and handling costs in the tax determination process. Shipping and handling items do not appear as line items in the Tax Details subtab.
Additional tax information – If you map transaction fields as additional tax information, the SuiteApp provides the plug-in with the information contained in the transaction fields.

The plug-in must be prepared to handle the additional tax information properly. For more information about mapping, see Creating Tax Information Mapping Records.

Tax Determination and Calculation

Transaction and Tax Determination Rules Fields Matching

Additional Properties for Tax Calculation

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