SuiteTax Latam Engine Tax Determination Process
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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.
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.
For more information about how the SuiteTax Latam Engine finds the applicable rules, see Transaction and Tax Determination Rules Fields Matching.
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 doesn't find any applicable tax determination rules, the system doesn't calculate taxes and displays an error message.
The following diagram summarizes SuiteTax Latam Engine's tax determination process:
For more specific tax scenarios, the SuiteTax Latam Engine provides the plug-in implementation with additional properties. For more information, see Additional Properties for Tax Calculation With SuiteTax Latam Engine.