RSMUS.comIntroduction
NetSuite SuiteTax is a powerful tool that NetSuite users can leverage to streamline and empower their tax management with automation and global flexibility. In an increasingly globalized economy, more and more businesses face the need to have an ERP that meets their geographical tax requirements. This can become a complex and time-consuming task that becomes a major pain point. Many countries have complex tax systems that in the current Legacy tax create barriers of capability and effort required to operate efficiently. This blog post will delve into the key benefits and current limitations of SuiteTax in comparison with the Legacy tax.
Nexus Determination:
SuiteTax features enhanced determination logic that considers Shipped to and Shipped From addresses including the location field. When determining the Nexus, the Nexus field and the Subsidiary Registration Tax Number are automatically populated based on the Nexus lookup logic. The logic consists of questions such as “Is Ship From Country tax based on Ship From?”, “Is Ship To Country a member of EU?”, “Is Customer Tax Registered?”, and “Does Tax Registration in Ship To Country exist?”. The above questions are part of the sales transaction Nexus determination logic. The full logic for both sales transactions and purchase transactions can be found here on the Oracle Help Centre.
In NetSuite’s Legacy Tax, a Nexus must be set up for each location they pay and collect taxes in. Nexuses are set up at the subsidiary level. Depending on the Ship To state and zip code on the transaction, the system will automatically assign Nexuses and determine the tax rate.
Additional SuiteTax Functionality:
Tax Engines: One of the key benefits of SuiteTax is its flexibility. If you have subsidiaries located in complex tax jurisdictions, SuiteTax gives you the freedom to explore and integrate other tax engines that are designed specifically to achieve proper tax reporting in those jurisdictions. If the subsidiary is in multiple tax jurisdictions, that is also not a problem as the subsidiary record allows for different tax engines by tax registration number.
Reporting: SuiteTax provides some updated reporting features. The additional Tax Point Date helps created more accurate reporting at the line level, as it defines the date a transaction takes place for tax purposes. The tax point date may not reflect the transaction date which determines the GL impact. In SuiteTax, the tax point date drives taxation. SuiteTax also provides product tax returns in each country’s local format, standard tax reporting framework and localization bundles, as well as U.S Sales Tax reporting.
Conclusion
Making the switch from the Legacy tax system to SuiteTax could be a game changing move for your global business. If you are interested in making the leap, do not hesitate to get in touch, and our team of NetSuite professionals will be eager to help.
