As the definition goes, a tax is a financial
levy or charge imposed by the local, state or federal government of the
taxpayer. There are two types of tax:
- Direct Tax - which are paid directly to the
government by the taxpayer such as Income Tax, Corporate Tax, etc..
- Indirect Tax - which is paid through one or
more intermediaries to the government. Examples of Indirect Tax include Sales
Tax, Value Added Tax (VAT), Service Tax, etc..
The ResellerClub Tax Engine module allows you to collect
any Indirect Taxes from your Customers and Sub-Resellers, when you sell any
product or service to them using our system.
Click here to view a
Flash Demo on the ResellerClub Tax Engine >>
Understanding how the Tax Engine works
1. The Tax Engine can handle only Variable
taxes as a percentage of the Invoice Amount. Any Fixed amount Tax needs to be
raised as a Miscellaneous Invoice separately.
2. Tax is stored against only Invoices.
3. A Tax Rule consists of
- Name of the Tax (eg. Sales Tax, VAT, etc.)
- Product Category for which the tax is
applicable
- Country and State combination to which the
rule applies
- Percentage of the Invoice amount for
calculating the tax
- Any information that you wish to display to
your Sub-Resellers and Customers when an Invoice is generated under this tax
rule
- Start and End Date of this Tax Rule
alongwith the applicable Time Zone
- Exempted Sub-Reseller and Customer Ids
4. The system does not allow you to create
conflicting tax rules and separate tax rules need to be created for each
Product/Service that you are selling for each unique State and Country
combination within a set timeframe. This means that if you are selling 2 products A and B, then you may
create rules such as -
|
Product Category |
Percentage of Invoice Amount |
Name of Tax |
Country |
State |
Time Zone |
Begin Date |
End Date |
| A |
10 |
Sales Tax |
Any Country |
Any State |
GMT |
10-08-2006 |
10-10-2006 |
| A |
15 |
Service Tax |
Any Country |
Any State |
GMT |
11-10-2006 |
10-08-2007 |
|
B |
6.3 |
Sales Tax |
USA |
Arizona |
MST |
10-08-2006 |
10-08-2007 |
|
B |
5 |
VAT |
China |
Beijing |
Beijing |
10-08-2006 |
10-08-2007 |
Let's analyze the above example,
- For Product A two Tax Rules have been created which are applicable to all Countries. This is only possible since
they do not have overlapping timeframes ie. the second tax rule is starting
after the first tax rule has ended.
- If more than 1 tax needs to be applied for a
particular Product for a unique Country & State combination, then you would
need to add all tax percentages and mention the same in a single Tax Rule
under an appropriately named Tax, so that your Sub-Resellers and Customers can
identify which tax they are paying.
5. If you modify an existing tax rule for a
Product/Service, then the system deactivates the previous tax rule and creates a
fresh one for the same, with the modifications submitted.
This implies that if say you modify the Percentage of Invoice Amount of an
existing rule, it would not modify the same in the previously generated
Invoices, and would only affect Invoices generated after this modification has
completed. The same is applicable for any other Tax Rule parameter such as
Invoice Footer.
