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Choosing a Tax Engine
When choosing your tax engine, consider your company’s scale, complexity, and auditing plans. Third-party integrations often provide reporting services, while the standard tax engine requires you to handle reporting in a separate process. (Salesforce Billing Managed Package)
Required Editions
| Available in: All Salesforce Billing Editions |
These tax engine options are available.
- No Tax Engine
- You can use Salesforce Billing without calculating tax. In this case, you don’t set up your Tax Integration object. Use a tax rule with Taxable (Yes/No) set to No, and don’t create a tax treatment. Salesforce Billing calculates invoice and invoice line amounts without tax.
- Standard Tax Engine
- Salesforce Billing provides an internal tax engine. Salesforce recommends using it for
simple and static tax calculations, such as VAT. Enter and update all tax rates manually. See
Create a Tax Rate and Tax Code for Standard Tax Integrations. Salesforce doesn’t provide tax
rate data.
Create a tax rule with Taxable (Yes/No) set to Yes and a tax treatment that indicates the standard tax integration. See Configure Salesforce Billing for Tax Calculation.
Tax is calculated only on the order products and invoice lines. The order and the invoice roll up the sum of the tax on the lines. Keep in mind that due to rounding tax values on the line, a small difference between the sum of the tax and the tax as calculated on the invoice total can occur.
When an order is created, the tax rule on each order product comes from the Product2 record. The tax treatment is assigned by matching the treatment that looks up to the rule with the same legal entity on the order product. The tax treatment is used to calculate the estimated tax on the order product. Changing the legal entity or the tax rule is allowed while the order product status is Draft. See Defining Rules and Treatments.
When an invoice is created, Salesforce uses the standard integration to find a tax rate that matches the address, tax code, and legal entity. Salesforce then applies the tax percentage to the appropriate invoice lines.
- Third-Party Tax Engine
- Third-party tax engines are available in AppExchange. When using a third-party tax
engine, set up the engine in the Tax Integrations object within Salesforce Billing
according to the provider’s instructions.
Create a tax rule with Taxable (Yes/No) set to Yes and a tax treatment that indicates the tax integration. See Configure Salesforce Billing for Tax Calculation.
When an order is created, the tax rule on each order product comes from the Product2 record. The tax treatment is assigned by matching the treatment that looks up to the rule with the same legal entity on the order product. The tax treatment is used to calculate the estimated tax on the order product. Changing the legal entity or the tax rule is allowed while the order product status is Draft. See Defining Rules and Treatments.
When an invoice is created, Salesforce calls the third-party engine for tax information based on the tax code from the tax treatment on the order product. Salesforce then applies the tax percentage to the appropriate invoice lines. Transactions are recorded in Salesforce and in the third-party engine.
Third-party tax engines can update their tax transaction records to align with Salesforce records. Your tax package provider can supply details. Third-party tax engines can also provide collection and remittance services that aren’t available in the standard tax engine. External vendors can let you define where you collect and remit taxes. These definitions ensure that you’re collecting the appropriate amount of taxes and remitting taxes to the correct jurisdiction based on city, state, or country.
Note When you use a third-party tax engines, Billing supports tax calculation for a maximum of 700 invoice lines. Custom development involving related objects such as Invoice, Invoice Line, Subinvoice Line, Order, and Order Products or any roll-up summaries that aggregate data to the related account can reduce this limit. Contact your tax integration provider for package specific details. - Custom-Built Integrations
- Salesforce Billing users can create and use custom integrations. See Salesforce Billing Tax Integration Developer Guide.
