Instructions to set up Taxes on a Category in RMS.

Overview

Taxes are allocated to a Category so they post automatically on the charges for that Category. Each tax you add can be calculated on the charge amount on its own, on the charge amount plus other taxes, or on the amount of another tax.

Please Note! RMS is highly configurable. Some Terminology, User Access & Permissions, Images, Labels, and Functions used in these articles may differ from your setup. CLICK HERE to find out more.

Guide

In the side menu of RMS, go to Setup > Category/Area.

1. Select Edit on an existing Category.

   

    

2. Navigate to the Accounting tab.
3. Select an Available Tax.
4. Select Allocate to assign the Tax to the Category. 

5. Select the Method to Calculate:

   • Use Amount
   • Use Amount + Previous Tax
   • Use Amount + All Previous Taxes
   • Based on Tax Amount From
   • Use Amount + Tax Amount From

   Where the Method to Calculate is Based on Tax Amount From or Use Amount + Tax Amount From, select the tax in the Based on column.

   Where the Method to Calculate is Use Amount + Tax Amount From, select a Calculate Tax On option.

   Repeat Steps 3 to 5 for each additional tax as required. 

6. Select the up or down arrow to set the Calculation Order. 

7. Select Save/Exit.

   

    

Important! The examples in this article are for demonstration purposes only. Properties should consult their accountant for the specific legislative requirements on taxes for their business, prior to completing tax setup in RMS. See Tax Examples by Country for tax setup examples by country.

Tax Calculation Methods

Every tax allocated to a Category has a Method to Calculate. This determines which amounts are added together before the tax is calculated. The Calculation Order determines the order the taxes are calculated in, from the top of the list down.

Please Note! The Based on and Calculate Tax On columns are named using the tax label configured for your property. On a property using the GST label they appear as Based on GST and Calculate GST On.

Important! The tax selected in the Based on column must be calculated before the tax that uses it. Use the Calculation Order to place it higher in the list. Where it sits lower in the list, the tax that uses it has no amount to calculate from and will not post correctly.

Examples of each Method to Calculate

The charge amount in these examples is 100.00. Three taxes are allocated to the Category in this Calculation Order: 

• VAT 5%, set to Use Amount, which posts 5.00
• Tourist Tax set to Tax Flat Amount, which posts 1.75
• Municipality Tax 5.4%. 

Only the Municipality Tax Method to Calculate changes in each row. For the tax types available when creating a tax, see Taxes - Tax Exclusive.

Tip! Use Amount + Previous Tax and Use Amount + All Previous Taxes return the same result when only one tax is allocated above the tax being calculated. The difference appears with three or more taxes, as shown above.

Setup and result for each Method to Calculate

Each option below shows the Allocated panel on the Edit Category Accounting tab, then the charge as it posts on the reservation account. The VAT and the Tourist Tax stay on Use Amount throughout, so only the Municipality Tax row changes. N/A means the column is unavailable for that Method to Calculate. Long values are shortened on screen where the column is narrower than the text.

Use Amount

Setup on the Category

Result on the reservation account

Use Amount + Previous Tax

Setup on the Category

Result on the reservation account

Use Amount + All Previous Taxes

Setup on the Category

Result on the reservation account

Based on Tax Amount From

Setup on the Category

Result on the reservation account

Use Amount + Tax Amount From, with Calculate Tax On set to Use Amount + Tax Amount Based On

Setup on the Category

Result on the reservation account

Calculate Tax On

A tax can be conditional, applying only when the amount falls within a set range. Selecting Use Amount + Tax Amount From makes the fourth column available: Calculate Tax On, shown as Calculate GST On or Calculate VAT On depending on your property's tax label. It allows the amount that decides whether the tax applies to differ from the amount the percentage is charged on.

Setting it to Use Amount + Tax Amount Based On, the default, charges the percentage on the charge amount plus the selected tax. That is the last option shown in the previous section, where the Municipality Tax posts 5.67. Setting it to Use Amount charges the percentage on the charge amount only, shown below. For conditional taxes and the other tax calculation options, see Taxes - Tax Exclusive.

Use Amount + Tax Amount From, with Calculate Tax On set to Use Amount

Setup on the Category

Result on the reservation account