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Test Authority Options in Model Scenarios

Before you put a changed authority option setting into production, always create a scenario in the Model Scenario to test the results. The following are examples of scenarios you can set up and adapt to your specific needs.
Example 1: Intra-Company Settings
The 2 examples below test settings of the Intra-Company Tax Free (IC) option.
Intra-Company Tax Free Option (IC) = True
Transaction Type
Shipping
Condition AND Value
Registration
Tax Result
Goods
Ship From is the same as Ship To (Canada).
Condition = None
Value = Yes (within the date range)
The registration number is the same for Buyer and Seller.
NL (Not Liable)
In this scenario, identical registrations are the clue that indicates that the transaction is intra-company. ONESOURCE Determination checks to see where the Ship From and Ship To addresses are and, if the registration numbers are the same, which concludes that the shipment is intra-company. No tax is calculated because most countries allow an intra-company transfer to be a non-taxable event.
Intra-Company Tax Free Option (IC) = False
Transaction Type
Shipping
Condition and Value
Registration
Tax Result
Goods
Ship From is the same as Ship To (Canada).
Condition = None
Value = No (within the date range).
The registration number is the same for Buyer and Seller.
For the Invoice Date, the result is 5% GST.
In this scenario, the settings are the same as the previous example, except that the intra-company tax free option is set to
No
 for a specific date. This scenario is uncommon because it would be rare to tax an intra-company transaction.
Example 2: CR Registration Requirements
The 2 examples below test settings of the Registration Required (CR) option.
Registration Required Authority Option (CR) = Required
Transaction Type
Shipping
Condition and Value
Tax Result
Goods
Ship From is the same as Ship To (Singapore).
  • Value: Both. Seller registration and Seller establishment are required to collect VAT.
  • Condition: Both. Includes both foreign and domestic.
No tax is calculated unless the Seller is registered in the authority.
In this scenario, there is a sales transaction within Singapore. Sending an established authority gives the desired taxability without sending a registration number. You must set the establishment for the relevant parameter for the authority being considered. In this scenario, the Seller must be registered with the Singapore Authority to collect GST.
Registration Required Authority Option (CR) = Any
Transaction Type
Shipping
Condition and Value
Tax Result
Goods
Ship From is the same as Ship To (Singapore)
  • Value: Any.
  • Condition: Both. Includes both foreign and domestic.
If the established authority is set to Singapore, GST will be calculated.
In this scenario, there is a sales transaction within Singapore. Both Ship From and Ship To are in Singapore. The CR condition is changed to
Any
 and the establishment is evaluated to collect the GST. The establishment setting can be set on the
Established Authorities
 tab or can be passed through the XML input.
Example 3: Reverse Charge
The examples below test settings of the Reverse Charge (RC) option. In all of these scenarios, both Buyer and Seller are registered in Mexico and have different numbers. The DS Reverse Charge is set to
Not Applicable/Not Applicable
 so it is off.
Reverse Charge (RC) Mexico = Not Applicable
Transaction Type
Shipping
Condition and Value
Tax Result
Default Services
Ship From is the same as Ship To.
  • Value: Not Applicable.
  • Condition: Not Applicable.
The transaction is taxed as usual.
The registrations are different, but the Ship To and Ship From are the same.
Reverse Charge (RC) Mexico = On
Transaction Type
Shipping
Condition and Value
Tax Result
Default Services
Ship From is the same as Ship To.
  • Value: Not Applicable
  • Condition: Domestic
Recovery of reverse charge is from the Ship From location.
Domestic condition is the crucial setting. If this was a different transaction type than Default Services, the calculation would be outside the authority of the option. Registration numbers are set but are different for the Buyer and Seller.
Reverse Charge (RC) Mexico = On
Transaction Type
Shipping
Condition and Value
Tax Result
Default Services
Ship From is the same as Ship To.
  • Value: Registration Required
  • Condition: Domestic
Reverse tax will be in effect if the Buyer is registered.
The reverse charge applies because the Buyer is registered, and the Seller is not established.
Reverse Charge (RC) Mexico = On
Transaction Type
Shipping
Condition and Value
Tax Result
Default Services
Ship From = Seller
  • Value: Establishment Required
  • Condition: Domestic
Reverse charge applies because the Seller's establishment is set to Y. The recovery of the reverse charge is in the Ship From location.
The Buyer and Seller are both registered in Mexico and have different numbers. The reverse charge applies because the Seller is established.

This article applies to:

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