INTERNATIONAL BRANDS (PVT.

)LIMITED
(IBL GROUP)

Training Manual
Tax Setup

Feb, 2016

A. F. FERGUSON & CO.

CHARTERED ACCOUNTANTS

A member firm of net

 Internation Brands Limited Tax Setup - Training Manual

Contents
1. Create Tax............................................................................................3
2. Create Tax Status, Jurisdiction and Recovery Rate..............................5
2.1 Tax Status......................................................................................................5
2.2 Tax Jurisdiction..............................................................................................6
2.3 Tax Recovery Rates........................................................................................7
3. Create Tax Rate....................................................................................8
4. Create Condition sets..........................................................................9
5. Tax Rules............................................................................................10
5.1 Default Tax rules..........................................................................................10
5.2 Expert Rule entry........................................................................................11
6. Update and Enable Tax......................................................................13

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 Internation Brands Limited Tax Setup - Training Manual

1. Create Tax
Navigate to Tax managers  Home. A HTML page opens which allows us to setup tax. Click on Tax
configuration tab and select Taxes from top.

Click Create button at bottom to start creating a new tax.

Example:

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 Internation Brands Limited Tax Setup - Training Manual

Follow these steps to create tax:

1. Enter tax regime code and configuration owner. At IBL FBR PK and Global Configuration owner
are used respectively.
2. Select ‘Create a new tax’ as tax source.
3. Enter Tax name in ‘Tax’ and ‘Tax Name’ fields.
4. Select ‘Sales_Tax’ as the tax type.
5. Enter Effective from date.
6. Enter Country, Country and Pakistan in Geography type, Parent geography type and Parent
geography name fields respectively.
7. Enter PKR as tax currency.
8. Select rounding rule, tax precision, exchange rate type and compounding precedence as
applicable.
9. Move to controls and defaults section.
10. Check the following boxes:
a. Use legal registration number
b. Allow duplicate tax registration number
c. Allow override for calculated tax lines
d. Allow entry of manual tax lines
e. Allow tax exemptions
f. Allow tax exceptions
g. Allow tax recovery
h. Allow tax recovery rate override
i. Allow tax rate rules
11. Enter ‘RECOVERABLE’ in Primary Recovery Type

The rest of information on this page will be filled after creating recovery codes, tax rates and rules. Press
Apply to save the created tax.

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 Internation Brands Limited Tax Setup - Training Manual

2. Create Tax Status, Jurisdiction and Recovery Rate

2.1 Tax Status

Enter following information:

1. Select FBR PK and Global Configuration Owner in regime and owner fields.
2. Enter the recently created Tax name in Tax field for example ‘Standard Goods Tax’.
3. Enter a suitable Tax Status Code and Name for example ‘STANDARD SGT’.
4. Enter the effective from date.
5. Check the Set as default button and enter the Default status effective from date.
6. Check the allow Tax rate Override button.
7. Select ‘Immediate’ in Default recovery settlement field.

Apply to save the tax status.

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 Internation Brands Limited Tax Setup - Training Manual

2.2 Tax Jurisdiction

Enter following information:

1. Enter a suitable tax jurisdiction code and name for example ‘Standard Goods Jurisdiction’.
2. Enter Tax regime and Tax name recently created.
3. Select ‘Country’ geography type from list with same tax.
4. Enter geography name ‘Pakistan’ and enter effective from date.
5. Check the Set as default tax jurisdiction.

Apply to save the tax jurisdiction.

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 Internation Brands Limited Tax Setup - Training Manual

2.3 Tax Recovery Rates

Enter following information:

1. Enter tax regime code and configuration owner.

2. Select ‘Tax’ that was recently created.
3. Enter a suitable tax recovery rate code for example ‘Fully recoverable’
4. Enter 100 in percentage recovery rate and effective from date.
5. Check the set as default rate and default effective from.

Press Apply to save the recovery rate.

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 Internation Brands Limited Tax Setup - Training Manual

3. Create Tax Rate

Enter following information to create tax rate:

1. Select Tax regime code and Tax configuration Owner.

2. Select Tax which was recently created for example Specific Goods Tax.
3. Enter the recently created tax status and jurisdiction codes.
4. Enter a suitable tax rate code for example ‘UNREG SGT 17+2+2%’
5. Enter tax rate in percentage column and enter the effective from date.
6. Press Rate Details button and check Set as Default Rate on one tax rate for every Tax. Enter the
‘Default Effective From Date’ and press Apply.

Now click the tax accounts button to enter General ledger information:

Enter the ledger for example IBL_OPS_LEDGER and press create. The following page appears:

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 Internation Brands Limited Tax Setup - Training Manual

Enter the Operating unit where the tax will be used and enter the tax account in the Tax
Recoverable/Liability field.

Press Apply to save tax account and then press apply again to save the tax rate.

4. Create Condition sets

Before creating tax rules, we must create condition sets for each Tax Rate. Click on Advanced Setup
options tab and select Tax Condition sets. Click Create Button.

Enter condition set name in both ‘Tax condition set’ and ‘Name’ fields. Select ‘IBL_TDFS_ST’ in
Determining Factor set field and select Pakistan in country name. Press Continue.

In Value/ From Range field, enter the tax rate code created above and click Finish button to save Tax
condition.

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 Internation Brands Limited Tax Setup - Training Manual

5. Tax Rules
Enter the search criteria to find the tax rules for the recently created tax and press go.

A list of rules appears for this tax:

5.1 Default Tax rules

First we select the defaults for applicable rules by pressing set default button:

1. Determine Place of supply: Select ‘Ship to, use bill to if ship to is not found’.
2. Determine Tax Registration: Select ‘Ship to, use bill to if ship to is not available’.
3. Determine Tax Status: Select ‘STANDARD SGT’ (Recently created)
4. Determine Tax Rate: Select any tax rate recently created.
5. Calculate Tax amount: Select ‘STANDARD_TC’
6. Determine Taxable Basis: Select ‘IBL_TFV_AV’

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 Internation Brands Limited Tax Setup - Training Manual

After selecting defaults in above rules, we can now create expert rules for the rest. In order to create
rules we will use Condition sets created above.

5.2 Expert Rule entry

Expert rules will be created for following rules:
1. Direct Tax Rate Determination
2. Determine Tax Rate

To create an expert rule, click on Expert Rule entry button. Following page appears:

Enter a suitable Rule Code and Name. Select an Effective from date and tax status code recently created.
Next, select ‘IBL_TDFS_ST’ in ‘Determining factor set code’ field and click next.

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 Internation Brands Limited Tax Setup - Training Manual

Now, as shown above, select the recently created condition set code and specify which tax code should
be applicable if condition set is met.

For example, we created a condition set named UNREG SF with ‘UNREG SF 17+2+2%’ tax classification
code. Then we entered it in expert rule and selected ‘UNREG SF 17+2+2%’ as result. In the same way we
will enter it in tax rules of both Additional Tax and General Sales Tax with result ‘17+2% Sales Tax’ and
‘17% Sales Tax’ respectively. This way, whenever system finds ‘UNREG SF 17+2+2%’ code on transaction
line, all three tax rates will be applicable.

After defining condition, click next.

Select 10 in rule order and press ‘Finish’ to save rule.

Important: After saving rule, we must enter the rule page again. A new ‘Enable’ button appears which
must be checked to activate the rule as shown below.

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 Internation Brands Limited Tax Setup - Training Manual

Create rules for both ‘Direct Tax Rate Determination’ and ‘Determine Tax Rate’ as shown above.
Remember to update rules of any other taxes as applicable.

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 Internation Brands Limited Tax Setup - Training Manual

6. Update and Enable Tax

Once all of the above steps have been followed, we can now update the tax and enable it for
transactions. Go to Tax page and search the recently created tax.

Click on update button. The tax page opens displaying information we entered earlier. Follow following
steps to finalize the tax:

1. Enter the recovery code created earlier, namely ‘Fully Recoverable’ in the Default Primary
Recovery Rate Code Field in Tax Recovery Controls Section.

2. Check the ‘Make Tax Available for Transactions’ field to enable the tax in Main Information
section.

Press Apply button to save changes. The tax is now ready to use.

A.F. Ferguson & Co.

A member firm of 14