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Tax Calculation Process
Understand the tax calculation process for invoices.
Required Editions
| Available in: Lightning Experience |
| Available in: Enterprise, Performance, Unlimited, and Developer Editions with the Revenue Cloud Advanced license or the Revenue Cloud Billing license |
Billing schedules generated for order products inherit tax treatment from the order products. When invoices are generated from billing schedules, the Calculate Tax API is triggered. This API then uses the tax engine specified for the billing schedules' tax treatment to calculate the applicable taxes. Estimated tax is calculated for draft invoices. Actual tax is calculated for posted invoices.
After the tax is calculated, tax details appear on the Invoice Line Tax records. Several fields, such as the ones that drive the calculation and the status of the calculation process, are updated. This table provides a comprehensive list of fields that are populated during and after the tax calculation.
| Invoice Line Tax Field | Description |
|---|---|
| Tax Amount | The total tax for the related invoice line. This amount is aggregated to the Tax Amount field of the Invoice Line object, which in turn is aggregated to the Total Tax field on the parent Invoice object. |
| Tax Code | The tax code is used to calculate the tax rate for the related invoice line. |
| Tax Document Number | The record in the external tax engine that corresponds to the related invoice line. |
| Tax Effective Date | The date that’s used to calculate the tax amount. |
| Tax Exempt Amount | The amount that's exempted from tax. |
| Tax Name | The name of the applied tax. |
| Tax Rate | The percentage value that’s used for calculating tax. |
| Tax Transaction Number | The record in the external tax engine that corresponds to the transaction that's related to the invoice line. |
- For account-level exemptions, use the Account ID as the reference key.
- For product-level exemptions, use the Product Code from the Product2 record.
During tax calculation, Billing sends account and product information in the tax request. The tax system uses these identifiers to evaluate and apply the appropriate exemption certificates.
