6 Replies Latest reply: Nov 23, 2010 7:46 PM by Uma Peddi

# Tax Calculation for Canada T&E  system

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Hi,

We are in the process implementing the T&E solution for canada.

My question is on canada taxes since in US, there is no tax recovery for all reimbursable expenses.

So my question, how it is calculation and what will be reimbursable amount for the traveller.

In US, i spend 100\$ for a hotel stay in georgia, I get 100\$ back.

In CANADA, based on high level discussion, taxes will be applied for certain expenses. So I am asking if a business traveller spends 100\$ for a hotel stay in Ontario, will the traveller get 100\$ back? Definetly I know taxes will be applied. My question, what is the reimbursable amount the traveller will get!! Some high level idea on tax calcuation for canada will give me a good idea.

• ###### Re: Tax Calculation for Canada T&E  system
Currently Being Moderated

Hi Deepan,

The employee should be reimbursed \$100 however, part of this will post to the expense g/l account (depending on the tax rate) and the tax amount will be posted to the account for tax. Hope this helps.

Sal

• ###### Re: Tax Calculation for Canada T&E  system
Currently Being Moderated

Hi Deepan,

The traveller should receive \$100 in your instance. Let me give an example.

Hotel Expenses = \$100

Taxes                = \$10

Total Amount Paid = \$110

In this case, the traveller should be reimbursed by \$110. But when he enters in the expense claim he should enter only \$100. The tax amount should be calculated automatically and posted in the system to the credit of employee.

Trust this helps.

Regards,

Raj

• ###### Re: Tax Calculation for Canada T&E  system
Currently Being Moderated

The solution we implemented is -- created separate non taxable expense type for standard expense type. put the 10\$ tax on to the new expense type.

• ###### Re: Tax Calculation for Canada T&E  system
Currently Being Moderated

Hi Rajagopalan,

We have the same requirement but we have tax codes and tax jurisdiction codes based on which the tax rate will be applied. Can you please suggest me how can we handle this in T&E system.

Thanks&Regards

Srinivas

• ###### Re: Tax Calculation for Canada T&E  system
Currently Being Moderated

Refer to  OSS Note 113646 - GST/HST rebate process for travel expense in Canada

and OSS Note 137604 - Canadian Flat Tax on Travel with Jurisdictions

This will help in configuring and setting up tax recovery process in T & E, specially for canada.

• ###### Re: Tax Calculation for Canada T&E  system
Currently Being Moderated

Thanks Salman,

You are right. Employee will get 100% reimbursed. But when we  post in GL, we have to calculate taxes from expense amount and post as a separate entity say for example non recoverable taxes.