Tax Rules and Treatments

Tax rules are a type of rule within the Salesforce Billing rules engine. All the products that you plan on billing require a lookup to a tax rule. When you order an invoice, your order products inherit this lookup.

A tax rule record contains the rule itself and a related list that contains the rule’s treatments. The rule determines whether Salesforce Billing performs an action on the order product when you create an invoice from an order. If Salesforce Billing performs that action, the treatments specify how that action is performed. They also define how a record of that action is stored in a general ledger account.

You can have multiple treatments on a rule, and each treatment can have a unique legal entity lookup. Salesforce Billing applies a treatment to an order product if the two records have matching legal entities. This process considers a broad group of order products under a single tax rule while specifying how smaller sets of order products in that group are treated based on their legal entities.

The tax rule contains a Name, Active, and Taxable (Yes/No) fields.

• If you select Yes for Taxable (Yes/No), your tax rule has to contain a tax treatment. Salesforce Billing calculates and applies tax to the invoice lines that are created from the order products that the tax rule is evaluating. Your treatments define whether Salesforce Billing uses its own tax integration or an external tax platform during tax calculation.
• If you select No for Taxable (Yes/No), your tax rule can’t contain a tax treatment. Use of a tax treatment for non-taxable products causes errors and unexpected behaviors.

Updates to the tax treatment on the order’s products isn’t supported. If a tax rule requires multiple tax treatments to satisfy business needs, we recommend multiple tax rules, each with a unique treatment for each affected legal entity. Rather than updating the treatment, update the order product tax rule by using a flow. Salesforce Billing updates the treatment. To change the rule or legal entity, make sure that the order is in the Draft status.

Important You’re limited to one tax treatment per legal entity.