Emtax™ system runs based on tax rules engine which processes transactions in the background and generates a tax codes to define different attributes of a transaction and apply tax laws appropriately. The tax codes are based on logical attributes used to make tax judgements on transactions. They are detailed below:

• tax_code_1: This defines the Vendor/ Customer country in a purchase/sales transaction
• tax_code_2: This defines the type of item - Goods (GD) or Services (SE)
• tax_code_3: This defines the type of transaction- Purchases (PA) or Sales (SA)
• tax_code_4: Place of supply determination
  • IC: In-Country transactions or transactions determined to be taking place inside the country based on the VAT rules defined in the Law.
  • IGC: Intra GCC Transactions
  • ROW: Transactions with the Rest of the World (outside GCC states). Note: All GCC countries which have not implemented VAT as of reporting date are part of ROW
  • OOS: Transactions determined to be Out of Scope as per country VAT Laws
  • NOT: Transactions which are in the nature of Government Services (ex: Visa charges levied by Government) which are outside the scope of VAT
  • ICN: Purchase Transactions with local Vendors who are not registered for VAT in-country
• tax_code_5: This defines the application of Reverse charge (RC) on goods and services or Import VAT on Import of Goods (IM)
• tax_code_6: This defines the Nature of relationship between the entity and its customer/ Vendor
  • VG: In-Country transactions or transactions determined to be taking place inside the country based on the VAT rules defined in the Law.
  • INT: Transactions within a Legal Entity
  • RP: Transactions with a related party company (i.e- group company, not part of VAT Group
  • TP: Transactions with third parties- external vendors/customers
• tax_code_7: Tax Rate determination (refer column U in Additional Detailed worksheet)
  • SR: Standard Rated Transactions
  • ZR: Zero Rated Transactions
  • EX: Exempt Transactions
  • NA: Not Applicable