Building on our previous article about enabling Advanced Taxes in NetSuite, this article focuses on the crucial next step: creating and managing nexuses. Nexuses play a vital role in accurately calculating taxes for your subsidiary companies.
A nexus defines tax jurisdiction in which user collects/pay taxes. They are an essential part of the Advanced Taxes feature in NetSuite, especially for NetSuite OneWorld. Every subsidiary company must be linked to at least one nexus. When you set up a subsidiary, the system automatically assigns a nexus based on the country in the subsidiary's address. It's also possible for a subsidiary to have multiple nexuses, and these can be shared among different subsidiaries for managing related tax items efficiently.
Creation of a nexus can be done in two ways: either through creation of subsidiary mentioned above or through the steps below:
1.Go to Setup > Accounting > Taxes > Nexuses > New.
2. In the Country field, select the country for which you are creating a nexus.
- If this nexus is in the U.S. or Canada, select the state, province, or county in the State/Province/County field. Leave this field blank for nexuses outside of the U.S. and Canada.
3. If the default list does not include a state, province, or county that you have a nexus with, you can create a new one at Setup > Company > Setup Tasks > States/Provinces/Counties.
4. In the Description field, enter a name for this nexus. On the Set Up Taxes page, this name appears on the Tax subtab of the country nexus tab.
5. Click Save.
Note: It is best to create and set up taxes for nexuses before you create subsidiary records.
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