Applying Canadian taxation to Orders

GST calculation for Orders involves enabling Canadian taxation method option for countries and applying GST taxes to product categories, individual products, and freight and handling charges.

Freight and handling taxes are charged in addition to any other taxes that are applied to products sold in the country using GST calculation, and freight and handling taxes are calculated on both taxable and nontaxable product purchases.

Which tax authority to use?

When processing orders using Canadian taxation, the Ship to Address’s country and state/province determine which tax authority is used for calculating taxes:

  • If the Use Taxation option is enabled for the Ship to Address’s country on the Country names window, verify whether the Ship to Address’s state/province code matches a tax code defined on the Set up tax codes window:
    • If a match exists, select the Ship to Address’s state/province code for the order’s Tax Authority on the Enter and edit orders window.
    • If a match does not exist, set the order’s Tax Authority on the Enter and edit orders window to equal the Tax Authority defined for the Default Organization on the Organization Names window (normally, this is the tax code defined for the Primary GST).
  • If the Use Taxation option is not enabled for the Ship to Address’s country on the Country names window, leave the order’s Tax Authority field blank on the Enter and edit orders window. No taxes will be charged.
  • For orders for which no country is defined for the Ship to Address, the assumption is that the Ship to customer shares the same home country as the organization and therefore is taxable. For a Ship to Address for which no country is defined, verify whether the Ship to Address’s state/province code matches a tax code defined on the Set up tax codes window:
    • If a match exists, select the Ship to Address’s state/province code for the order’s Tax Authority on the Enter and edit orders window.
    • If a match does not exist, set the order’s Tax Authority on the Enter and edit orders window to equal the Tax Authority defined for the Default Organization on the Organization Names window (normally, this is the tax code defined for the Primary GST).

Before you begin

Ensure that the following setup tasks are complete:

  1. Enable the Canadian taxation method for the default organization.
  2. Define the GST and PST tax codes.
  3. Define the default tax authority.

To apply taxation to a product in AR/Cash

  1. From AR/Cash, select Set up tables > Products to open the Set up products window.
  2. Select a product code from the list of Current Products.
  3. Click Edit.
  4. Enable the Taxable (GST) and/or Taxable (PST) options.
  5. Click Save.

To apply taxation to a product category

Warning!  

Tax settings at the product level override those at the category level. That is, if you enable taxes for a category but not for a product in that category, no taxes are calculated; if you disable taxes for a category but enable them for a product in that category, taxes are calculated.

  1. From Orders, select Set up tables > Product categories to open the Set up product categories window.
  2. Select a product category from the list of Current Categories.
  3. Click Edit.
  4. Enable the Taxable (GST) and/or Taxable (PST) options.
  5. Click Save.

To apply taxation to a single product

  1. From Orders, select Manage inventory> Manage products to open the Manage products window.
  2. Select a product code from the list of Current Products.
  3. Click Edit.
  4. Enable the Taxable (GST) and/or Taxable (PST) options.
  5. Click Save.

To apply taxation to freight and handling charges

  1. From Orders, select Set up module to open the Set up module window.
  2. Click Add-on Charges to open the Add-on Charges window.
  3. Click Edit.
  4. Enable the Apply Sales Tax to Freight Charges and Apply Sales Tax to Handling Charges options.
  5. Click Save.