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Authority options reference

You can use the authority options to:
  • Control voluntary tax situations and tax categorizations.
  • Modify the Custom Authority behavior by changing the value of one of the options associated with the template used to create the authority.
  • Perform VAT overrides for custom interpretation of transaction tax laws, such as application of reverse charge rules, non-established taxable persons (NETP), exceptions, and VAT groups.
Option
Description
Condition
Value
Brazilian Province Utility - ICMS
For inter-provincial transactions, indicates whether the authority is a province of the south or north of Brazil for the purpose of ICMS Special Rate determination.
  • North: The province is a northern province.
  • South: The province is a southern province.
None
Chain Transaction Transportation
A series of sales where the goods are shipped directly from the 1st Seller to the final customer.


Sets the delivery terms in each country for the party responsible for goods transport. Indicates whether pick-up cases (POTT='O', Buyer responsible for transport) has an impact on the taxability of chain transactions for the authority.

None
When POTT is 'O' (origin):
  • Either: Always impacts the taxability for this authority.
  • Ship From: Considered only when the authority is the Ship From country.
  • Ship To: Considered only when the authority is the Ship To country.
  • Ignore: Has no impact.
CR - Registration Required
Determines the registration and establishment requirements for a Seller to collect VAT on domestic, foreign, or both transactions for the specified authority.


The Determination first evaluates whether the reverse charge (per transaction type) applies. If not, then Determination evaluates whether the Seller can collect VAT. If the reverse charge doesn't apply, the authority options associated with the ability of the Seller to collect VAT are evaluated (CR - Registration Required and DE - Domestic Establishment Only).

  • Both: Applies to both domestic and foreign transactions.
  • Domestic Transaction: Applies to domestic transactions.
  • Foreign Transaction: Applies only to international transactions.
  • Not Applicable: Seller registration and establishment are irrelevant.
  • Any: Seller registration or Seller establishment is required to collect VAT.
  • Both: Seller registration and Seller establishment are required to collect VAT.
  • Not Applicable: Neither Seller registration or Seller establishment is required to collect VAT.
  • Registration Required: Only Seller registration is required to collect VAT.
DE - Domestic Establishment Only
Determines whether or not non-registered domestic Sellers who are established in the authority are allowed to collect VAT on domestic sales. Applies only to: Determines whether or not non-registered domestic Sellers who are established in the authority are allowed to collect VAT on domestic sales. Applies only to:
  • Goods
  • Domestic transactions
  • In the EU
ONESOURCE Determination first evaluates whether Reverse Charge (per-transaction type) applies. If not, then ONESOURCE Determination evaluates whether the Seller can collect VAT. If Reverse Charge doesn’t apply, the authority options associated with the ability of the Seller to collect VAT are evaluated (CR - Registration Required and DE - Domestic Establishment Only).
None
  • Yes: Require establishment only to enable domestic entities to collect VAT on domestic sales.
  • No: Require establishment and registration to enable domestic entities to collect VAT on domestic sales.
ER - Establishment Required
Determines whether or not non-established foreign entities are allowed to collect VAT on domestic sales. Applies to a particular domestic reverse charge transaction in the EU.
Specifies the elements that must be present for the Buyer to reverse charge VAT.
ONESOURCE Determination first evaluates whether Reverse Charge (per-transaction type) applies. If not, then ONESOURCE Determination evaluates whether the Seller can collect VAT.
None
Conditions are hard coded in ONESOURCE Determination.
If the authority option is enabled, the reverse change will apply if:
  • The seller is not established in the country.
  • The buyer is registered in the country.
  • Buyer is established in the country.
  • Yes: Require establishment to enable non-established foreign entities to collect VAT on domestic sales.
  • No: Don’t require establishment to enable non-established foreign entities to collect VAT on domestic sales.
Filing Groups <TRX_TYPE>
Indicates whether transactions between companies that belong to the same VAT Group create taxability or not. VAT Group Registration can be set up in Company Data in Determination.
VAT group registrations are enabled for those authorities which support it, for the transaction types those authorities support. Use this option to disable the VAT Group Registrations for a specified transaction type for this authority.
None
  • Yes: Enable VAT Group Registrations for this transaction type. The intra-group supplies and purchases of the specific transaction type have no VAT liability.
  • No: Disable VAT Group Registrations for this transaction type. The intra-group supplies and purchases of the specific transaction type must be taxed.
Foreign Seller - <TRX_TYPE>
Determines whether or not a Not Liable tax line will be returned when a Seller is not required to charge tax, but the transaction hasn’t met the requirements for reverse charge or some other exemption.
For example, services are provided by a Seller who is located in another country and not registered with the authority. The Buyer is not eligible for reverse charge.
If this option is set to Yes, a Not Liable tax line will be returned. If set to No, normal taxes will apply.
None
  • Yes: Returns a Not Liable tax line.
  • No: Doesn’t return a Not Liable tax line. Normal taxes will apply.
Include past terminate processing zones
For bottom-up processing, this Determines whether a custom authority is included in calculations if the custom authority is above the termination zone.
None
  • Yes: ONESOURCE Determination includes custom authorities for evaluation above the termination zone.
  • No: ONESOURCE Determination doesn’t include custom authorities for evaluation above the termination zone.
  • Use Company Option or System Setting: This is the default, and it directs ONESOURCE Determination to defer to the inclusion settings in the company option or the system configuration.
For details about this authority option, see the topic Custom Authorities Associated with Bottom-Up/Terminate Zones.
Intra-company tax free sale - <TRX_TYPE>
Determines whether transactions between companies using the same VAT registration number for an authority are tax-free.
None
  • Yes: The intra-company sales and purchases of the specific transaction type have no VAT liability.
  • No: The intra-company sales and purchases of the specific transaction type must be taxed.
PRL - Parent Registration Lookup
Enables the evaluation of registrations of a parent company as set up in ONESOURCE Determination company data. Determines which registration masks to match when processing a transaction: either the current authority's masks or the current authority plus parent zone authorities. For example, Quebec enables both the Quebec Provincial masks as well as the Canadian Federal mask.
None
  • Yes: Use this authority and parent zone authority registration masks. Child company uses parent company registrations.
  • No: Use only this authority's registration masks. The child company can't use the parent company registrations.
<XX> - <TRX_TYPE> Reverse Charge
Determines whether a Buyer is eligible for a reverse charge based on a combination of Buyer and Seller registration and Seller establishment for all international jurisdictions.
ONESOURCE Determination first evaluates whether Reverse Charge (per-transaction type) applies. If not, then ONESOURCE Determination evaluates whether the Seller can collect VAT. If Reverse Charge doesn’t apply, the authority options associated with ability of the Seller to collect VAT are evaluated (CR - Registration Required and DE - Domestic Establishment Only).
When the Buyer must reverse charge VAT, the following results are returned:
  • Buyer: RC tax type (I and O).
  • Seller: NL tax type.
If the Reverse Charge doesn’t apply, and the Seller is eligible to collect VAT, standard tax is returned. If the Seller is not eligible to collect, ONESOURCE Determination returns the following results:
  • Seller: Severity 2 error ("Seller must register.").
  • Buyer: Severity 1 warning or NL tax type (not liable) or UN tax type (unregistered Seller, Version 5.2.1 only).
  • Both: Registration requirements are considered for all transactions. The authority option applies to both foreign and domestic.
  • Domestic Transaction: Registration requirements are considered for domestic transactions only.
  • Foreign Transaction: Registration requirements are considered for foreign transactions only.
  • Not Applicable: Always treat a transaction as ineligible for reverse charge.
  • Both: Buyer registration and Seller establishment must be evaluated. The Reverse charge applies if the Seller is not established and the Buyer is registered.
  • Dual Registration: Both Buyer and Seller registration must be evaluated. Reverse charge applies if the Seller isn't registered and the Buyer is registered.
  • Establishment Required: Buyer registration is irrelevant, but Seller establishment must be evaluated. Reverse charge applies if the Seller is established.
  • Not Applicable: Buyer registration and Seller establishment are irrelevant. Reverse charge always applies, regardless of Seller and Buyer registration and establishment.
  • Registration Required: Buyer registration is required, but Seller establishment is irrelevant. The Reverse charge applies if the Seller is not registered.
Tax Direction
Determines whether or not tax direction processing is (VAT or VAT-like) or is not (Sales and Use Tax) used for this authority.
None
  • Yes: VAT or a VAT-like authority which includes tax direction (input and output).
  • No: Sales and Use Tax.
Triangulation Simplification
Specifies what elements must be satisfied for the transaction to be eligible for Triangulation Simplification.
In addition to country rules, allows custom settings for each country when a chain transaction may involve countries with conflicting rules. Each country in the chain:
  • Is an EU member.
  • Is registered in their own country.
  • Is not registered in another country in the chain.
  • Can have different Registration and Establishment conditions for triangulation.
  • Can transport goods to any party in the chain.
None
  • Always: Simplification always applies.
  • Not Established in Ship To: Simplification applies if Company B is not established in Ship To.
  • Not Registered in Ship To: Simplification applies if Company B is not registered in Ship To.
  • Not Registered in Ship From and Ship To: Simplification applies if Company B is not registered in Ship From or Ship To.
  • Not Applicable: Simplification never applies.
Turn Off Authority
Determines whether or not this authority will ever be considered in tax calculations. The default for all authorities is to not set this value (the authority may be considered in tax calculations).
None
  • Yes: Turn off this authority. No tax amounts or any other data will be calculated or returned for this authority.
  • No: Don’t turn off this authority. the authority is turned on and will be evaluated.
UE - Used and Enjoyed
Under VAT law, in some cases, the place of use and enjoyment of a service can change the jurisdiction that has authority to charge VAT for the services.
In the EU, the Use and Enjoyment provision applies only when there is a non-EU country involved in the supply:
  • The service is supplied to a customer located outside the EU but the service is used and enjoyed in the EU or
  • The service is supplied to a customer located in the EU but the service is used and enjoyed outside the EU.
For ONESOURCE Determination, the place where the service is used and enjoyed must be the Supply Location. This authority option determines if a service is taxed in the Supply Location or the Buyer Primary Location.
This authority option may need to be set to accommodate specific business needs.
  • Not Applicable: Standard processing applies.
  • Both: Use and enjoyment location always overrides Buyer location. The authority will tax the service if used in its country and won’t tax if used and enjoyed outside the EU.
  • Domestic Transaction: Use and enjoyment location overrides Buyer location if it will create EU taxation for non-EU Buyer. The authority will tax the service if used and enjoyed in its country.
  • Foreign Transaction: Use and enjoyment location overrides Buyer location if it will avoid EU taxation for EU Buyer. The authority won’t tax the service if used and enjoyed outside the EU.
None
United States Bracket System
Flags whether or not an authority follows the U.S. Bracket System logic. For more information, see Bracket Tax System.
None
  • Yes: Authority uses bracket calculation logic in conjunction with authority rule qualifiers.
  • No: Not a bracket authority (default).
Voluntary Use Tax Applied
Voluntary Use Tax affects several authorities in the United States which have enacted use tax where the compliance is voluntary.
None
  • Yes: Accrue Voluntary Use Tax.
  • No: Don’t accrue Voluntary Use Tax.

This article applies to:

  • PRODUCT: ONESOURCE Determination,ONESOURCE Indirect Tax,ONESOURCE Determination
  • Subject: Authorities