Tax Calculation service – sales tax group determination

  • Article

Important

This content is archived and is not being updated. For the latest documentation, go to What's new or changed in Dynamics 365 Finance. For the latest release plans, go to Dynamics 365 and Microsoft Power Platform release plans.

Enabled for Public preview General availability
Users by admins, makers, or analysts Apr 16, 2021 Oct 8, 2021

Business value

The digitalization of tax and the steady stream of indirect tax regulations that global businesses encounter, such as VAT and GST, have further complicated existing processes by introducing new industry and compliance risks that challenge leaders in every global enterprise.

Tax Calculation allows you to improve compliance with associated local regulations. The new, configurable microservice (preview) enhances the tax determination and calculation capabilities in Dynamics 365 Finance and Dynamics 365 Supply Chain Management. Tax Calculation is fully integrated out of the box, and enables you to:

  • Automate and standardize tax determinations and calculations across countries or regions.
  • Use a configurable tax determination matrix and flexible calculation designer to configure and execute complex tax determination rules and calculations by using formulae and conditions.
  • Simplify compliance maintenance for local tax regulations.

Feature details

This feature is part of the Tax Calculation capabilities to support flexible tax determination. With this feature, determination of sales tax group and item sales tax group is supported in the Tax Calculation service:

  • Sales tax group and item sales tax group is still populated with the default value on the transaction header and line.
  • When tax calculation starts, the value of the sales tax group and the item sales tax group is sent to the Tax Calculation service.
  • The Tax Calculation service will provide two matrices, one to determine the sales tax group and one to determine the item sales tax group.
  • If a new sales tax group or item sales tax group value can be determined from the matrices, the Tax Calculation service will replace it with the default value. Otherwise, the default values will continue to be used.
  • The Tax Calculation service uses the intersection of sales tax group and item sales tax group to determine tax codes and rates.

See also

Sales tax applicability and sales tax group determination logic (docs)