Information on configuring Taxes in RMS.
Overview
Tax Exclusive properties can configure applicable taxes in RMS using a variety of flexible options to suit regional and business requirements.
Taxes vary worldwide, but some examples include a tourist tax, city tax, tourism fees, and municipality fees.
Tax Calculation Options
RMS supports several tax calculation methods, including:
Conditional Taxes
Flat Amount
Per Person
Tax Configuration
Each tax can be assigned a specific Tax Class or grouped under a Tax Grouping for streamlined reporting.
Tax Schedules can be set up in advance to automatically adjust tax rates effective from a specific date.
Category-Based Taxes
Taxes can be applied in a Calculation Order or calculated based on another applicable tax, depending on local tax regulations.
Tax Exemptions
RMS allows configuration of Tax Exemptions to exclude certain taxes under specific conditions.
You can also create Tax Exemptions with Alternate Taxes where applicable.
Owner Income Tax (Trust Accounting)
For Tax Exclusive Trust Accounting properties, RMS supports the configuration of Owner Income Tax for accurate trust accounting and reporting.
Optional Tax Selections
| Option | Description |
|---|---|
| Include this Tax before adding other Taxes | When selected, this tax is calculated before other taxes are added to the reservation. This ensures the tax forms part of the base for any subsequent compound tax calculations. |
| Include Package | When selected, package amounts on the reservation - both inclusive and exclusive packages - are included in the tax slab calculation. This ensures the combined accommodation and package total determines the applicable tax slab, rather than the accommodation charge alone. |
| Tax to be calculated on the Full amount minus inclusive tax | When selected, the tax is calculated on the gross amount after deducting any inclusive tax component. |
| Exclude Discounts From Tax Calculation | When selected, discounts applied to the reservation do not reduce the taxable base. Tax is calculated on the pre-discount amount. |
| Owner Income (Trust) | When selected, this tax is applied to owner income transactions. Use this option for properties that use the Owner Income Tax feature in Trust Accounting. |
| Add Inclusive Tax to Tax Transaction | When selected, the inclusive tax component is added to the tax transaction. Enter a value in the Use Divisor field to specify the calculation factor for the inclusive tax amount. |
| Always Round Tax Down | When selected, the calculated tax amount is always rounded down to the nearest cent, regardless of standard rounding rules. |
Guide
In the side menu of RMS, go to Setup > Accounting > Taxes.
- Select 'Add'.
- Enter a Description.
- Select the Tax Class.
- Select a GL Account Code.
- Select 'Tax Applies for Entire Stay' or 'Tax Only Applies to the First - Nights'.
Select Additional Tax Options (Optional). - Navigate to the 'Properties'
- Select 'Add'.
- Select the Property.
- Select Allocate,
- Select 'Apply\Exit'
- Navigate to the Tax Types tab.
- Select the Tax Exclusive, Tax Flat Amount, Per Peron\Per Day or Per Person.
- Select 'Save\Exit'.
Navigate to the Schedule tab if needing to add a date schedule (Optional).
Important Information
This is where Tax Exclusive can surprise users—because changing the Base Rate changes the tax calculation, and changing the Total Rate triggers a reverse-tax calculation.
Overriding rates (Base Rate vs Total Rate)
Base Rate
RMS treats the new value as exclusive of tax
RMS then recalculates taxes based on your tax rules
Total changes accordingly
Total Rate
The Total Rate is the new "final" value
RMS reverse-calculates the base + tax split
Discounts
Discounts typically reduce the charge amount, and RMS will then calculate tax based on the discounted value (because tax is applied to the taxable base).
What to watch for
A percentage discount usually reduces Base and therefore reduces tax as well
A Total Rate override discount (or overriding the total) can trigger reverse-tax behaviour and change how Base/Tax are split
If you discount a reservation that originated from an OTA where the incoming amount was treated as tax inclusive, you may unintentionally discount the "inclusive total" and change base/tax unexpectedly
Consequence: Discounts can change not only what the guest pays, but also:
is shown on invoices
accommodation revenue figures (base)
net revenue after commission (if commission doesn't change)
Commissions
If you override the rate in RMS, you may change Base/Tax/Total without changing the commission amount originally supplied/expected by the OTA.
-
This can create mismatches between:
OTA payout statements
RMS reservation totals
accounting reconciliation
Channel Management
Tax-exclusive properties that use the RMS Channel Manager may see additional tax options in the Channel Mapping screen for certain OTA connections. These options control how RMS handles tax on rates sent to the OTA and how the total amount on incoming bookings is processed.
For details on the Inc Tax and Reverse Calculate Taxes on Total Rate options, see Tax Settings in Channel Mapping.
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