Tax settings

Tax settings at the project level are used in conjunction with organization-level tax settings to estimate contract taxes before publishing a contract. You can use the project settings to add additional taxes to a project, such as a state or county tax. Taxes entered at the project level are listed before those configured at the organization level. Project level taxes cannot be deleted if the tax has already been used. If a tax is no longer applicable, you can deactivate it for future contracts. Marking a tax as inactive removes the tax type for future contracts estimated taxes, but the tax column remains in any register where it was listed if any contract on the project was created before the tax type as deactivated.

Projects can configure the following for taxes:

• Tax description

• Tax type

• ERP code

• Default percent

• Country code

• Calculate payment form tax (net amount or gross amount)

• Include in committed cost

• Active status

Organization-level taxes are shown based on the project's country and tax type country code. They are marked with the information icon. Organization-level taxes without a country code appear in all projects. You can activate or inactivate an organization-level tax, edit the default percentage, change whether to calculate the tax in a payment form based on the net or gross amount, and whether to include the tax in the committed cost.

The tax description is a label that makes the tax recognizable to users. When a tax is referenced, the tax description is shown in the InEight cloud platform, which matches the tax type or ERP code used in APIs.

The tax type is used to identify the tax. Tax types must be unique by country code. The tax type values are especially important in a proxy ERP environment to identify and match the taxes in the response. If you use an invoice response from OneDrive to overwrite the taxes with a tax type that does not match the project settings, Contract cannot read, store, or display the tax.

The ERP code is used to send information to the ERP system. If you are an ERP customer, you must match ERP codes. The Tax type code should be sent in purchase order responses. If you use a Proxy ERP, this field is ignored. You can set a country code, so the tax is only applicable to projects in a specific country. You can also indicate whether to calculate the tax on the payment form net amount (after retention is withheld) or the gross amount (before retention is withheld).

How tax is calculated depends on whether Contract is integrated with an ERP system, whether Contract Tax Request (Application integration > Other) is configured, and whether the contract has been published. Prior to publishing or clicking Estimate tax, the line item taxes are always estimated from project settings. The table below represents how taxes are calculated when the purchase order is published or Estimate tax is clicked.

If tax is calculated in	ERP system or proxy ERP	Used to figure tax
Unpublished contract	ERP with Contract: Tax Request configured	Contract: Tax Request
Unpublished contract	ERP system without Contract: Tax Request configured	Settings
Unpublished contract	Proxy ERP	Settings
Published contract	ERP system	PO response from ERP
Published contract	Proxy ERP	Simulated purchase order response (using settings)
Payment form line items	Both	Estimated proportionally from PO response
Payment form details summary	Both	User-entered tax when adding invoice. The tax fields and tax types are from the project settings

Each tax type established here and in the organization settings defaults to include in committed cost This configuration includes the taxes in the committed cost values in Control.