This article explains the tax options available in the Channel Mapping screen for tax-exclusive properties using the RMS Channel Manager.
Overview
For properties configured as tax-exclusive in Accounting Options, the Channel Mapping screen may display additional tax options alongside the standard No Update column. These options control how RMS handles tax when sending rates to an Online Travel Agent (OTA) and how incoming bookings from that OTA are processed in RMS.
Two tax options may be available, depending on the channel, the property's tax setup and the database:
- Inc Taxes - available on certain OTA connections for tax-exclusive properties.
- Reverse Calculate Taxes on Total Rate - a separate setting for the whole channel connection, not a column on the mapping grid. It is only available on some databases, and on Airbnb connections for properties in the United Arab Emirates.
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.
Please Note! The Inc Taxes column only appears for properties configured as tax-exclusive in Accounting Options, on channels that support receiving rates that include tax. If your property uses tax-inclusive pricing, the Inc Taxes column will not be visible in the Channel Mapping screen.
Inc Taxes
The Inc Taxes checkbox appears as an additional column in the Channel Mapping grid for tax-exclusive properties on supported OTA connections. It controls whether tax is included in the rates sent to the OTA and how the total amount on incoming bookings is interpreted when written to RMS.
When Inc Taxes is disabled
When the Inc Taxes checkbox is not selected for a mapping row:
- RMS sends rates from Rate Manager to the OTA as-is, without tax added.
- Bookings received from the OTA are treated as tax-exclusive when written to RMS.
- The total amount received from the OTA equals the sum of the Base Rate and Package. RMS then adds taxes on top of this amount, according to the tax setup configured at the property.
- RMS applies every tax configured at the property, including taxes that cover only part of a stay and taxes that depend on the charge amount.
When Inc Taxes is enabled
When the Inc Taxes checkbox is selected for a mapping row:
- RMS adds tax to the rates from Rate Manager before sending them to the OTA. The OTA receives tax-inclusive prices.
- Bookings received from the OTA are treated as tax-inclusive when written to RMS.
- The total amount received from the OTA is placed into the Total Rate field. RMS then reverse-calculates the taxes according to the property's tax setup to determine the Base Rate and Package amounts.
- RMS cannot reverse-calculate every kind of tax. RMS leaves off the booking any tax it cannot work backwards. See Taxes that are not applied to bookings from a channel below.
Reverse Calculate Taxes on Total Rate
The Reverse Calculate Taxes on Total Rate checkbox is a separate setting from Inc Taxes. You set it once for the whole channel connection, under Reservation Settings on the Channel Mapping screen, rather than on each mapping row. It is only available on some databases, and on Airbnb connections for properties in the United Arab Emirates. It is designed for tax-exclusive properties.
You need a daily password to enable or disable this option.
When Reverse Calculate Taxes on Total Rate is enabled:
- RMS sends rates from Rate Manager to the OTA as-is, without tax added. The OTA receives tax-exclusive prices.
- Bookings received from the OTA are treated as tax-inclusive when written to RMS.
- The total amount received from the OTA is placed into the Total Rate field. RMS reverse-calculates the taxes according to the property's tax setup to determine the Base Rate and Package amounts.
This option allows a property to send tax-exclusive rates to the OTA while still treating incoming bookings as tax-inclusive for accounting purposes.
Because RMS works the tax back out of the total the OTA sends, this option has the same limitation as Inc Taxes. See Taxes that are not applied to bookings from a channel below.
Taxes that are not applied to bookings from a channel
When either Inc Taxes or Reverse Calculate Taxes on Total Rate is enabled, RMS treats the amount an Online Travel Agent (OTA) sends as a tax-inclusive total and works backwards from it to find the Base Rate and the tax. Some taxes cannot be worked out this way, and RMS leaves those taxes off the booking rather than estimating them.
Inc Taxes appears only on tax-exclusive properties, and Reverse Calculate Taxes on Total Rate is designed for them. On a tax-inclusive property, RMS sends the Rate Manager rate to the channel as-is and charges the taxes below as normal.
RMS cannot work a tax backwards from a total when the tax:
- uses Tax Only Applies To First with a value in the Nights field, so it covers only part of a stay. A City Tax limited to the first five nights is a common example.
- uses the Apply If option, so it applies only when the charge falls within a set range.
- uses a Method that takes its value from another tax, so it is calculated from that tax rather than from the charge.
A tax that applies for the whole stay at a fixed percentage or amount is not affected, because RMS can always work that one backwards.
RMS charges all three kinds of tax normally on bookings from a channel where neither Inc Taxes nor Reverse Calculate Taxes on Total Rate is enabled, and on reservations made in RMS, because the stay length and the charge are both known at that point.
Important! Check your tax records before enabling Inc Taxes or Reverse Calculate Taxes on Total Rate. If a tax uses Tax Only Applies To First, Apply If, or a Method based on another tax, RMS does not charge it on bookings from that channel, and the shortfall does not appear as an error.
Comparison
| Setting | Rates sent to OTA | Incoming bookings treated as |
|---|---|---|
| Inc Taxes disabled | Tax-exclusive (sent as-is from Rate Manager) | Tax-exclusive - RMS adds tax on top of the total received |
| Inc Taxes enabled | Tax-inclusive (tax added to rates before sending) | Tax-inclusive - RMS reverse-calculates tax from the total received |
| Reverse Calculate Taxes on Total Rate | Tax-exclusive (sent as-is from Rate Manager) | Tax-inclusive - RMS reverse-calculates tax from the total received |
Important! Do not use Inc Taxes and Reverse Calculate Taxes on Total Rate on the same channel. RMS does not stop you selecting both, but if both are enabled, mapping rows with Inc Taxes selected send rates that include tax, the other rows send rates without tax, and RMS treats every booking from the channel as tax-inclusive.
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