Use Tax Groups to combine your tax codes into tax groups to calculate multiple taxes on single taxable items in your Payables and Purchasing transactions. You can also use this feature to manage multiple tax recovery requirements. If you only use single tax codes with a single recovery rate, you do not need to set up tax groups.

You can use your tax groups with any transactions that you enter along your procure–to–pay chain. When you use a tax group, the system calculates the tax amounts for each tax code in that tax group. You can assign any Sales or user–defined tax code to a tax group. These tax codes can have associated offset taxes, and recovery rules or recovery rates.
Attention: The tax rates and accounting entries used throughout this manual are provided for illustration purposes only.

Please contact a tax professional for specific implementation requirements. You can assign individual tax codes to tax groups in the Tax Groups window. After you define your tax groups, you can either enter a tax group or an individual tax code in fields that require a tax code. For example, you can enter a tax group name in the Tax Code field in the Invoices window. The system will then calculate multiple taxes for the invoice. You can assign the same tax group to multiple taxable items on an invoice. However, you can use only one tax group within a single invoice.

The Tax Defaulting Hierarchy can also use tax group values to provide default tax values to transactions you enter.