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NetSuite application offers Legacy Tax and SuiteTax modules to help simplify tax calculations. Currently, as part of the NetSuite Integration, we integrate with the tax module. SuiteTax replaces existing tax functionality (hereafter referred to as Legacy Tax), and these features are not built to coexist in a single environment.
In Chargebee, taxes are applied whenever an invoice is generated for a subscription, renewal, or a one-time charge. Chargebee checks the customer's region to map taxes based on their location if a tax applies to the customer. If a tax is not applicable, Chargebee creates invoices without any tax details. The following flowchart displays the flow of tax sync workflow between Chargebee and NetSuite. It helps you understand how taxes are mapped based on different regions.
Note:
If the customer's Chargebee account is integrated with Avalara for tax calculation in the NetSuite connector, we support tax sync only for the United States (US) region. For other regions, we recommend using the Chargebee Tax module.
This feature is enabled on request. Contact support to avail this feature.
SuiteTax is a customization model offered by NetSuite. It automatically identifies the customer's shipping or billing information to calculate the taxes for each item in the invoice. The SuiteTax engine is a bundle installed in NetSuite where the tax calculation occurs within NetSuite. It can also add localization tax for regions such as India. If the customer uses SuiteTax and installs the bundle for each region, there are pre-defined taxes. The tax rates are created as part of the custom field, which is not loaded in the Standard Rate field.
Follow these steps to configure tax and manage tax mapping in Chargebee:
While configuring the integration, under Manage Tax Mapping:
For the United States (US) region, the tax codes and tax rates are passed to each line item and tax codes are created in NetSuite. You should create a tax agency (according to NetSuite's guidelines) for creating tax codes in NetSuite.
For other regions, you must manually perform Chargebee-NetSuite tax mapping. The read-only tax codes are derived from the tax configuration in Chargebee and the options to list the tax codes are configured in NetSuite. The tax rates between Chargebee and NetSuite tax codes are mapped when invoices are synced for other countries.
Note:
If tax mapping is not available for a specific country, Chargebee will look for the default tax code mapping and send them as part of each line item.
For the US region, the NetSuite connector creates and maps the tax codes to each line item.
To create the tax codes in NetSuite, follow these steps:
1. Create a Tax Control Account and Tax Type
To create a Tax Control Account and Tax Type in NetSuite:
2. Create a Vendor (Tax Agency)
To create a Tax Agency in NetSuite:
Navigate to List > Relationship > Vendor in your NetSuite account.
Before creating a Tax Code, create a Vendor with the "Tax Agency" category in Chargebee. See the screenshot below for an example:
The naming format of the Vendor:
<TAX_JURISDICTION>_<TAX_JURISDICTION_TYPE>_Tax
<TAX JURISDICTION> = CALIFORNIA and <TAX_JURISDICTION_TYPE> = STATE" followed by "_Tax
<tax_juris_code>_<TAX_JURISDICTION_TYPE>_<Tax format>
Associate a tax account to a Vendor by setting it up under the Financial module of your NetSuite account.
3. Create Tax Codes
CB_<TAX JURISDICTION>_<TAX JURISDICTION TYPE>@<RATE>
4. Create a Tax Group
A tax group is used to combine multiple tax codes.
To create a tax group in NetSuite:
CB_US_<STATE>@<RATE>
Note:
The above setup is mandatory for Chargebee to send tax information. We recommend having a NetSuite consultant for detailed configuration of the tax module within NetSuite based on your business needs.
This feature is enabled on request. Contact support to avail this feature.
The following actions take place when the SuiteTax module is enabled in NetSuite:
Note:
Limitations The tax code and other tax-related information for each line item are not updated since the SuiteTax engine does not allow overrides.
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