Tax Calculation in Field Service

Every organization must pay sales taxes to different tax authorities. Each country have their own specified set of rules and rates for collecting taxes.


In dynamics 365 field service, sales tax setup is pre-configured that specifies how much tax will be applied to your products, agreements, and services. Sales tax will be added to the total amount of work order based upon the on work order details like work order type, service account and billing account.


Now, let’s see how the tax calculation is scheduled in calculating the sales tax for the work order.


Configuration
Navigate to change area in Field Service-> Settings-> Tax Codes in which list of Active tax codes will be displayed. Click on New.

Once the New button is clicked, it will redirect to a new tax code page where the necessary information should be provided like:


Under General tab:


Name: Provide the name of Tax code.


Tax Rate%: Define the value for tax rate % that should be specified for products, services and agreements.


Act as Group: This field should be considered if there are multiple types of tax in single area.

For instance, an Indian government has charges State Goods and Service tax (SGST) and Central goods and services tax (CGST).


If it is set to yes, then specify the details like, go to Tax Code Details tab and click +Add Tax Code Detail record, specify the tax code.


Under Items Taxable tab, tax components should be defined whether it is applicable to products, services and agreements.


If products, services and agreements taxable is set to yes, then in the work order whenever this products, services or agreements associated with the work order this tax amount will be included.


Products: While performing a work order if any product is used at customer’s location, then the tax will be calculated for that product.


Service: Whenever a field service technician performs some service at customer’s location, then the tax will calculated for the hours spent.


Agreement: If there is any sort of agreement set while performing the work order with in the frequency and date range set, then the tax will calculated.


If it is set to “No” then in the work order whenever this products, services or agreements associated with the work order then this tax amount will not be included.


Functionality

Here, to calculate sales tax to work order, initially in Work order type entity “Taxable” field should be set to yes, as the work order type will be used in work order creation.

Now navigate to Services-> Work Order. Open the existing work order or create a new work order.

In work order type field, it will display the look up of all the work order type records which has taxable filed as Yes.

So, under the summary tab, in the Sales tax section, taxable field will be populated as Yes automatically upon selecting work order type.


If the taxable field is yes, then provide the value for sales tax code field which will be a mandatory filed. It will have a look up of all the Tax code entity records.
 

Note: If the taxable field is set to No on the work order, then sales tax code field will be hidden and sales tax will not be calculated.

Now, under services tab, it will display the services associated with that work order.


Note: Since, on work order incident type field value is selected, all the services associated are displaying under services tab for this work order. However, service can also be manually added.

Open the service record, under general tab set taxable field as yes for the tax percentage to get calculated, change the line status to Used and provide the duration under Duration and sale amount tab

In a similar manner, sales tax for the products associated under work order also will be calculated.

Open the product record, under general tab set taxable field as yes for the tax percentage to get calculated and change the line status to Used and also provide the quantity in pricing tab

Under the summary tab, in the Total section, sales tax (10% defined in tax code) will be displayed in the Total Sales Tax field, which will be added to the Total Amount field.


Calculation of sales tax in work order

Product: Total Amount of product line items * Tax% (2500*10%) = 2500+250= 2750

Services: Total Amount of service line items * Tax% (3960*10%) = 3960+396=4356

Total Amount: 7106


On the work order, once the system status to “Closed-posted” to an invoice will be generated

Now, navigate to Sales-> Invoices, open the existing invoice generated for the work order. You can observe that the sales tax is calculated for the total amount in the work order.



If you need any further assistance, feel free to email us at salesteam@mtccrm.com