Tax calculationThe following types of tax calculation are explained: Tax on sales invoices Tax on sales invoices, which are created in the Sales Invoices (tfacr1110s000) session, can be calculated at two levels:
You can use the tax at invoice header level, if only one tax type applies to the invoice. If there are several tax types, you must define the tax by transaction line. You can define the level of tax calculation for each invoice in the Level of Tax Calculation field of the Sales Invoices (tfacr1110s000) session. You can define the default value in the ACP Parameters (tfacp0100m000) session. If you select tax calculation at invoice header level in the Sales Invoices (tfacr1110s000) session, you can enter:
LN calculates a default tax amount that is based on the total invoice amount, the tax country, the tax code, and the invoice's document date. If you do not enter a tax code, the tax amount automatically becomes zero and cannot be changed. If you select tax calculation at transaction line level in the Sales Invoices (tfacr1110s000) session, you must enter a tax country at invoice header level. However, you cannot enter a tax code or a tax amount. You must enter a tax code and a tax amount separately for each transaction line in the Transactions (tfgld1102m300) session. LN calculates the total tax amount for the invoice based on the separate tax amounts that are entered for the transaction lines. After entering the transactions, you can view the total tax amount in the Tax Amount in Payment Currency field of the Sales Invoices (tfacr1110s000) session. The default tax amount is calculated based on:
In the Tax Codes by Line (tfgld1109m000) session, you can specify the tax amounts. If singular tax is used, only one line is shown. If multiple tax is used, you can specify the tax amounts for each transaction line. Shifted tax Shifted tax is kept aside and is not included in the total tax amount. The shifted tax amount is posted to a tax account. Simultaneously, a reverse entry is generated on a tax contra-account. In the tax analysis the amount is included twice:
Shifted tax is used in The Netherlands in relation to legislation concerning the responsibility for payment of taxes and social security contributions (invoices from subcontractors to the main contractor). Shifted tax can be used in the European Union for purchase invoices from other EU countries. Such invoices do not state tax, but when posting the invoices you must calculate a fictitious tax amount (against the national tax rate), which is included on the tax report as chargeable and payable. Tax on purchase invoices Tax on purchase invoices, which are created in the Purchase Invoice Entry (tfacp2600m000) session, can be calculated at two levels:
You can use the tax at invoice header level, if only one tax type applies to the invoice. If several tax types apply, you must define the tax by transaction line. You can define the tax-calculation level by using the Level of Tax Calculation field in the Purchase Invoice Entry (tfacp2600m000) session. The default value of this field depends on the parameter settings for the Accounts Payable module. If the tax calculation level is at invoice-header level, you can enter a tax code and a tax amount in the Purchase Invoice Entry (tfacp2600m000) session. LN enters a default tax amount that is based on:
The incorrect default tax amount appears if:
If you do not enter a tax code, the tax amount automatically becomes zero and cannot be changed. You must enter the tax code and the tax amount by transaction line in one of the following sessions:
After you exit one of these sessions, LN calculates the total tax amount, which is displayed in the Purchase Invoice Entry (tfacp2600m000) session. Note If multiple tax is used, you can specify the tax amounts for each transaction line in the Tax Codes by Line (tfgld1109m000) session. The Tax Codes by Line (tfgld1109m000) session can be activated when the level of tax calculation equals the header. If expense tax is used, the tax amounts are reclassed during approval:
There are also reversals of tax which is posted during registration, if the tax code of the invoice and the order are different. Then the whole tax of the invoice is reclassed in case of expense tax only. During approval the tax is posted again, but now using the tax code of the order. If cost items are concerned and the item group equals one of the item group specified in the Item Groups (tcmcs0123m000) session, the tax of this cost item is reclassed to the account that is entered via the Matched Purchase Invoice/Statement Line Transactions (tfacp1133s000) session, which you can start via the Cost Item command of the Specific menu of the Match Purchase Order Lines (tfacp2541m000) session. So not to the debit account of expense purchase tax of the integration mapping scheme: this debit account is only used for purchased items, and for cost items which do not have the item groups specified in the Item Groups (tcmcs0123m000) session equal to the item group of the cost item. And in other cases not to the original cost account. Tax on advance payments In some countries tax is charged on advance payments/receipts, which exceed a certain minimum amount. If you want to charge tax on advance payments/receipts, you must select the Calculate Tax on Advance Payments/Receipts check box in the CMG Parameters (tfcmg0100s000) session. You must also enter the minimum amount in the Minimum Amount for Tax Calculation field of the CMG Parameters (tfcmg0100s000) session. If an advance payment is made or received, you can specify a tax amount in these sessions:
LN enters the singular tax amount on the Purchase Tax on Advance Payments ledger account and the Sales Tax on Advance Receipts ledger account. You can define these ledger accounts in the Posting Data for Tax Codes (tfgld0171s000) session. LN enters the multiple tax amount on the Purchase Tax on Advance Payments ledger account and the Sales Tax on Advance Receipts ledger account. You can define these ledger accounts in the Posting Data for Multiple Tax Codes (tfgld0170s000) session. Tax on settled discounts In some countries the charged tax is settled, for example, when a cash discount is deducted from an invoice. If you select the Adjust Tax for Deductions check box in the CMG Parameters (tfcmg0100s000) session, the tax amount for anticipated payments is adjusted in case of:
You can define the step at which settlement must take place in case of anticipated payments in the Posting Data by Bank/Payment Method (tfcmg0146s000) session.
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