1) Where does the tax rate on transaction come from? How to set tax codes for Pakistan?
In SuiteTax, we need to create tax codes and tax types for Pakistan manually as there is no localization bundle. These tax codes need to be set in Nexus for default tax codes for purchase, sales, import, and export as well as for Goods and Services.
In the customer/vendor record, we need to associate the nexus of the customer and add tax details. We also have the option of setting the default tax code for the nexus line. We do not need to set this unless the customer/vendor tax rate is different from the default one set in nexus preferences.
In the item record, we have the option of categorizing items into Goods or Services. Based on this category, the corresponding code is selected from the nexus preferences.
On selection of the customer and item, by default the nexus will be the subsidiary nexus and the code associated with this nexus will apply. If any location is selected, then the Nexus associated with its state will be the nexus in the transaction and the code will be the default code set in that nexus. if the tax reg number of the entity is selected or populated, then the nexus in the entity record’s tax reg line is considered.
2) Unable to create nexus for ICT. The following error is shown:
Items you have requested in the record have been deleted since you retrieved the form
The issue seems to stem from the State Short name character limit. Change the short name to a name with fewer characters and save. Then we will be able to create the nexus with that state/province.
3) How is the default nexus populating in transactions for the Pakistan subsidiary?
When the location is not selected in the transaction, the nexus is linked to the state in the subsidiary address. If the location is selected on the transaction, the nexus will change accordingly.
4) Is there any way to configure the Income tax for Pakistan?
Since the tax code cannot be created with negative amount and there is no withholding tax option in the configurations for SuiteTax, we cannot set the withholding tax for Pakistan. Also, due to the complexity of the tax calculation in this scenario, it would be better to use a script customization for the Pakistan withholding tax.
5) Where do we set the default tax codes for SuiteTax without localization?
After creation of the nexus in the account, we will get the option to set the preferences in the Nexus record as well as set the default codes for purchase and sales. At the time of creation, the preferences will not be shown. It is after creation that the preference option will be available.
6) For Pakistan, the Service items has sales tax of 3%, 5%, and 15% for Sindhu, Punjab and ICT respectively for both purchase and sales, whereas the rate for Goods is 15% irrespective of nexus. How do we set up this in NetSuite SuiteTax account?
In the item record, we have the option of setting up the Tax Item Type with the options of Goods or Services. In the Nexus record, under the Default Tax Codes/Groups we can set the default codes for purchase, sales, export, import for goods and service items.