Sales tax posting groups are set up in a matrix that combines tax business and product posting groups, similar to the General Posting Setup page. Each combination determines the accounts used to post sales tax for sales and purchase transactions. This page is named Tax Posting Setup in the US, and VAT Posting Setup in Canada and Mexico, but works the same way in all three.
For North America, sales tax is calculated as a percentage of the purchase price and is added to the total amount paid by the consumer. The rate of sales tax and which goods and services are subject to it vary depending on the jurisdiction.
To manually enter a sales tax posting setup line, follow these steps:
- Click the
icon, enter Tax Posting Setup (Canada and Mexico: VAT Posting Setup), and select the relevant link. - In the VAT Bus. Posting Group field, enter the relevant business posting group.
- In the VAT Prod. Posting Group field, enter the relevant product posting group to complete the combination.
- In the VAT Calculation Type field, select Sales Tax. This field must be set to Sales Tax for the US, Canada, and Mexico, so that sales tax is calculated using the Tax Areas, Tax Groups, and Tax Jurisdictions setup instead of VAT. A VAT % rate is not needed for this setup, as it is not used when the VAT Calculation Type is Sales Tax.
For more information on how to set up tax posting in Business Central, see Enter lines in VAT posting setup.