Entering Tax Codes and Types for LEDES Invoice Submission (for Vendors and Law Firms)

This article is for vendors and law firms. 

This article covers:

Finding the Correct Tax Type

You'll need to include the tax type if you submit invoices in LEDES 98BI format due to your client's tax requirements. This field is labeled LINE_ITEM_TAX_TYPE in a LEDES 98BI invoice. For further information, visit https://ledes.org/ledes-98bi-format/. This value can vary depending on how the client has configured the platform due to their AP requirements.  

You can open the PDF upload section to confirm your client's tax type (jurisdiction). Please note that this is a workaround that will help you to gather the information, and you are not required to complete the PDF upload process. Follow these steps:

  1. Navigate to Menu > Invoices > Upload PDF
  2. Click on Choose File to upload a PDF from your desktop. This can be a dummy PDF file.
  3. Once the PDF has been uploaded, use the Matter Search bar to select the matter that the invoice relates to. An invoice can only relate to a single matter.
  4. When asked, 'Is this a resubmitted invoice?', select No to continue
  5. Select Hourly Fees or Agreed Fixed Fee.
  6. Next, scroll down to the tax rates section and select the Jurisdiction to which you are billing, which will auto-populate the Type field.

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  7. The above example shows that if we are billing to the Australian jurisdiction, the correct tax type is GST. This means that GST is the correct value for the LINE_ITEM_TAX_TYPE field.

Submitting in LEDES 98BI Format Without Tax

Some clients will require that you use LEDES 98BI format. 98BI is required if the client has Brightflag's tax engine switched on, enabling them to capture tax rates and codes for all jurisdictions. However, for regions such as the US, tax is not required. Here are some further details on the tax-related fields on a 98BI file:

  • CLIENT_TAX_ID: not required on Brightflag
  • LINE_ITEM_TAX_RATE: input a zero value here
  • LINE_ITEM_TAX_TOTAL: input a zero value here
  • LINE_ITEM_TAX_TYPE: this should match the jurisdiction. To find the correct jurisdiction, follow these steps
  • INVOICE_REPORTED_TAX_TOTAL: input a zero value here
  • INVOICE_TAX_CURRENCY: the 3-letter currency code on the invoice (USD, EUR, GBP, etc.)
    • If the invoice includes taxes based on the client’s entity, the value in the LAW_FIRM_COUNTRY field must match the jurisdiction/country of the client’s entity being billed. 
  • CLIENT_COUNTRY: input the country code here, e.g. US. This will inform Brightflag of the jurisdiction of the invoice. This field can have 2 characters.

For a step-by-step guide to submitting a LEDES invoice, click here

 

 

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