Hi Alka,

Tax Determining factor sets are the set of rules by which you can define / govern how system calculates tax. For ex: Geography is one of the determining factor class, where by if you want to derive tax and tax rate on transaction based on the Geography of either Bill to or bill from location (Tax Class qualifier) which could be either a country / city / state etc. (Determining factor name) then it can be used.

You need to note then in tax rules just Determining factor set is not enough, you need to also define tax condition set. Determining factor set helps you determine the basis for tax calculation, in above example it could be Country. It is the condition set where you tell system which country (UK, US, India etc.).

How to define rules for IC AR and AP Invoices

You can use tax determining factor sets and condition set and define some codes / registration statuses at IC supplier customer level which are be used to control tax rate on the IC transaction. Which determining factor set to be used would depend on the requirement but broadly in my past implementations we were able to achieve requirement through:

1. Transaction Input Factor (Factor Class) and User-defined Fiscal Classification (Factor Name)

OR

2. Registration (Factor Class), Bill to (Tax Class Qualifier)  and Registration Status (Factor Name)