Skip Headers
JD Edwards World Tax Reference Guide
Release A9.3.x

E21545-05
Go to Documentation Home
Home
Go to Book List
Book List
Go to Table of Contents
Contents
Go to Index
Index
Go to Feedback page
Contact Us

Go to previous page
Previous
Go to next page
Next
PDF · Mobi · ePub

C Examples of Tax Explanation Code Accounting

This chapter contains these topics:

C.1 Example Data Sets

The examples included in this section do not show discounts. To review how the system calculates discounts, see Chapter 11, "Tax Rules by Company".

The examples include the following setup.

Tax explanation codes:

Tax Explanation Code Description
V VAT (called GST in Canada)
VT Same as V (tax only)
V+ Same as V (calculated as a tax on a tax)
U Use Tax, Self-Assessed (called PST in Canada)
UT Same as U (tax only)
S Sales Tax, Seller-Assessed (called PST in Canada)
ST Same as S (tax only)
E Exempt (product is not taxable)
B GST + Self-Assessed PST (not calculated as a tax on a tax when Tax Calculation Method is set to No)
B GST + Self-Assessed PST (calculated as a tax on a tax when Tax Calculation Method is set to Yes)
BT Same as B (tax only)
C GST + Seller-Assessed PST (not calculated as a tax on a tax when Tax Calculation Method is set to No)
C GST + Seller-Assessed PST (calculated as a tax on a tax when Tax Calculation Method is set to Yes)
CT Same as C (tax only)

The examples use the following AAI items for taxes:

Sequence Number Description Company Bus. Unit Object Sub Item
4.060 Accrued Use / Self Assessment Tax 1 4423   PT
4.060 Vat Recoverable on Purchase 1 4430   PTNS40
4.060 Vat Recoverable on Purchase 1 1240   PTTXTX
4.060 Vat Recoverable on Purchase 70 70 1240   PTVATB
4.060 Vat Recoverable on Purchase 1 1240 A PTVAT1
4.060 Vat Recoverable on Purchase 1 1240 B PTVAT2

The examples use three tax rate/areas:

  • Area1 has a 7% tax and an 8% tax. Tax is not calculated as a tax on a tax and has an effective rate of 15%.

Figure C-1 Example 1:Area 1

Description of Figure C-1 follows
Description of "Figure C-1 Example 1:Area 1"

  • Area2 has a 7% tax and an 8% tax. Tax is calculated as a tax on a tax and has an effective rate of 15.56%.

Figure C-2 Example 2: Area 2

Description of Figure C-2 follows
Description of "Figure C-2 Example 2: Area 2"

  • Area3 has a 7% tax and an 8% tax. 30% of the 7% VAT is not eligible for input credits. Tax is not calculated as a tax on a tax and has an effective rate of 15%. This is the same as Area1, but with a 30% non-recoverable VAT/GST.

Figure C-3 Example 3: Area 3

Description of Figure C-3 follows
Description of "Figure C-3 Example 3: Area 3"

C.2 Guidelines

  • B and C Tax Explanation Codes (for Canada). Even though these codes have the same distribution amounts, notice that the system posts them differently. B posts the PST amount to a payables account and C does not. This is because self-assessed PST is not included in the invoice amount for the B tax explanation code and is not paid to the supplier but to the province tax authorities.

  • Posting Problems. The system posts to the accounts you specified with AAIs. If you encounter posting problems, ensure that your AAIs point to the account you intend. For additional information about AAIs, see Chapter 10, "Automatic Accounting Instructions (AAIs)".

  • General Ledger Distribution. G/L distribution is the amount to be allocated to general ledger accounts, such as revenue and expense accounts. Generally, the distribution amount is the goods plus sales tax because this is the true cost of purchased goods. VAT is not included in the distribution amount because, typically, a company is reimbursed for VAT paid to suppliers when the company sells those goods.

  • Discounts. The examples in this chapter do not show discounts. See Chapter 11, "Tax Rules by Company" to review discount examples.

C.3 V VAT (GST in Canada)

Figure C-4 Speed Voucher Entry

Description of Figure C-4 follows
Description of "Figure C-4 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-5 General Ledger Post - Voucher Entry report

Description of Figure C-5 follows
Description of "Figure C-5 General Ledger Post - Voucher Entry report"

VAT1 = $1000 goods x .07 tax rate = $70

VAT2 = $1000 goods x .08 tax rate = $80

Dr 1000 G/L distribution

Dr 70 VAT1 receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Dr 80 VAT2 receivable account 1.1240.B

This is the account that AAI item PTVAT2 points to.

Cr 1150 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1150 = $1000 goods +$70 VAT1 + $80 VAT2

This page shows a journal entry for tax explanation code V.

Figure C-6 Journal Entry for Tax Explanation Code V

Description of Figure C-6 follows
Description of "Figure C-6 Journal Entry for Tax Explanation Code V"

The system posts the transaction above as shown on the report below.

Figure C-7 General Ledger Post, General Accounting report

Description of Figure C-7 follows
Description of "Figure C-7 General Ledger Post, General Accounting report"

For journal entries, the system posts the entire $150 VAT to the first tax authority in tax rate/area AREA1.

C.4 VT VAT (tax only)

Figure C-8 Speed Voucher Entry

Description of Figure C-8 follows
Description of "Figure C-8 Speed Voucher Entry "

The system posts the transaction above as shown on the report below.

Figure C-9 General Ledger Post - Voucher Entry report

Description of Figure C-9 follows
Description of "Figure C-9 General Ledger Post - Voucher Entry report"

VAT1 =$150 tax x (.07/.15) = $70

VAT2 = $150 tax x (.08/.15) = $80

Dr 0 G/L distribution

Dr 70 VAT receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Dr 80 VAT receivable account 1.1240.B

This is the acount that AAI item PTVAT2 points to.

Cr 150 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1070 = $70 VAT1 + $80 VAT2

This page shows a journal entry for tax explanation code VT.

Figure C-10 Journal Entry for Tax Explanation Code VT

Description of Figure C-10 follows
Description of "Figure C-10 Journal Entry for Tax Explanation Code VT"

The system posts the transaction above as shown on the report below.

Figure C-11 General Ledger Post, General Accounting report

Description of Figure C-11 follows
Description of "Figure C-11 General Ledger Post, General Accounting report"

For journal entries, the system posts the entire $150 VAT to the first tax authority in tax rate/area AREA1.

C.5 V+ VAT (calculated as a tax on a tax)

Figure C-12 Speed Voucher Entry

Description of Figure C-12 follows
Description of "Figure C-12 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-13 General Ledger Post - Voucher Entryreport

Description of Figure C-13 follows
Description of "Figure C-13 General Ledger Post - Voucher Entryreport"

VAT1 = $1000 goods x .07 tax rate = $70

VAT2 = ($1000 goods + $70 VAT) x . 08 tax rate =$85.60

Dr 1000.00 G/L distribution

Dr 70.00 VAT receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Dr 85.60 VAT receivable account 1.1240.B

This is the account that AAI item PTVAT2 points to.

Cr 1155.60 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1155.60 = $1000 goods +$70 VAT1 + $85.60 VAT2

C.6 U Use Tax, Self-Assessed (PST in Canada)

Figure C-14 Speed Voucher Entry

Description of Figure C-14 follows
Description of "Figure C-14 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-15 General Ledger Post - Voucher Entry report

Description of Figure C-15 follows
Description of "Figure C-15 General Ledger Post - Voucher Entry report"

Use Tax = $1000 goods x .15 tax rate = $150

Dr 150 G/L distribution

$1150 = $1000 goods + $150 use tax

Cr 50 Self-assessed tax payable account 1.4423.AREA1

This is the account that AAI item PT_ _ _ _ points to (business unit and object 1.4423) plus the subsidiary account identifying the tax rate/area (Area1).

Cr 1000 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

C.7 UT Use Tax, Self-Assessed (tax only)

Figure C-16 Speed Voucher Entry

Description of Figure C-16 follows
Description of "Figure C-16 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-17 General Ledger Post - Voucher Entry report

Description of Figure C-17 follows
Description of "Figure C-17 General Ledger Post - Voucher Entry report"

Use Tax = $150

Dr 150 G/L distribution

Cr 150 Self-assessed tax payable account 1.4423.AREA1

This is the account that AAI item PT_ _ _ _ points to (business unit and object 1.4423) plus the subsidiary account identifying the tax rate/area (Area1).

C.8 S Sales Tax, Seller-Assessed (PST in Canada)

Figure C-18 Speed Voucher Entry

Description of Figure C-18 follows
Description of "Figure C-18 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-19 General Ledger Post - Voucher Entry report

Description of Figure C-19 follows
Description of "Figure C-19 General Ledger Post - Voucher Entry report"

Sales Tax = $1000 goods x .15 tax rate = $150

Dr 1150 G/L distribution

$1150 = $1000 goods + $150 sales tax

Cr 1150 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1150 = $1000 goods + $150 sales tax

Note:

For sales orders, the system posts to an offset account. The next page shows an example.

This page shows the sales order information.

Figure C-20 Enter Orders (page mode)

Description of Figure C-20 follows
Description of "Figure C-20 Enter Orders (page mode)"

Figure C-21 Sales Order Entry page

Description of Figure C-21 follows
Description of "Figure C-21 Sales Order Entry page"

Figure C-22 Online Invoices page

Description of Figure C-22 follows
Description of "Figure C-22 Online Invoices page"

This page shows how the system posts the sales order.

Figure C-23 General Ledger Post - Invoice Entry report

Description of Figure C-23 follows
Description of "Figure C-23 General Ledger Post - Invoice Entry report"

VAT1 = $1000 goods x .07 tax rate = $70

VAT2 = $1000 goods x .08 tax rate = $80

Dr 1150 Accounts receivable account 40.1210

This is the account that AAI item RCxxxx points to.

$1150 = $1000 goods + $70 VAT1 + $80 VAT2

Dr 650 Cost of goods sold

Cr 70 Tax account 10.4550.A

This is the account that AAI table 4250 points to.

Cr 80 Tax account 10.4550.B

This is the account that AAI table 4250 points to.

Cr 1000 G/L distribution (sales account)

Cr 650 Inventory for the cost of the goods sold

C.9 ST Sales Tax, Seller-Assessed (tax only)

Figure C-24 Speed Voucher Entry

Description of Figure C-24 follows
Description of "Figure C-24 Speed Voucher Entry "

The system posts the transaction above as shown on the report below.

Figure C-25 General Ledger Post - Voucher Entry report

Description of Figure C-25 follows
Description of "Figure C-25 General Ledger Post - Voucher Entry report"

Sales Tax = $150

Dr 150 G/L distribution

Cr 150 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

C.10 E Exempt (the product is not taxable)

Figure C-26 Speed Voucher Entry

Description of Figure C-26 follows
Description of "Figure C-26 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-27 General Ledger Post - Voucher Entry report

Description of Figure C-27 follows
Description of "Figure C-27 General Ledger Post - Voucher Entry report"

Dr 1000 G/L distribution

Cr 1000 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

C.11 Canadian Tax Explanation Code Examples

C.11.1 B GST + Self-Assessed PST (not calculated as a tax on a tax)

Figure C-28 Speed Voucher Entry

Description of Figure C-28 follows
Description of "Figure C-28 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-29 General Ledger Post - Voucher Entry report

Description of Figure C-29 follows
Description of "Figure C-29 General Ledger Post - Voucher Entry report"

GST = $1000 goods x .07 tax rate = $70

PST = $1000 goods x .08 tax rate = $80

Dr 1080 G/L distribution

$1080 = $1000 goods + $80 PST

Dr 70 GST receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Cr 80 Self-assessed tax payable account 1.4423.AREA1.

This is the account that AAI item PT_ _ _ _ points to (business unit and object 1.4423) plus the subsidiary account identifying the tax rate/area (Area1).

Cr 1070 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1070 = $1000 goods + $70 GST

C.11.2 B GST + Self-Assessed PST (calculated as a tax on a tax)

Figure C-30 Speed Voucher Entry

Description of Figure C-30 follows
Description of "Figure C-30 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-31 General Ledger Post - Voucher Entry report

Description of Figure C-31 follows
Description of "Figure C-31 General Ledger Post - Voucher Entry report"

GST = $1000 goods x .07 tax rate = $70

PST = ($1000 goods + $70 GST) x .08 tax rate =$85.60

Dr 1085.60 G/L distribution

$1085.60 = $1000 goods + $85.60 PST

Dr 70.00 GST receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Cr 85.60 Self-assessed tax payable account 1.4423.AREA2.

This is the account that AAI item PT_ _ _ _ points to (business unit and object 1.4423) plus the subsidiary account identifying the tax rate/area (Area2).

Cr 1070.00 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1070 = $1000 goods +$70 GST

C.11.3 BT GST + Self-Assessed PST (tax only)

Figure C-32 Speed Voucher Entry

Description of Figure C-32 follows
Description of "Figure C-32 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-33 General Ledger Post - Voucher Entry report

Description of Figure C-33 follows
Description of "Figure C-33 General Ledger Post - Voucher Entry report"

GST =$150 tax x (.07/.15) = $70

PST = $150 tax x (.08/.15) = $80

Dr 80 G/L distribution 

$80 = $80 PST

Dr 70 GST receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Cr 80 Self-assessed tax payable account 1.4423.AREA1.

This is the account that AAI item PT_ _ _ _ points to (business unit and object1.4423) plus the subsidiary account identifying the tax rate/area (Area1).

Cr 70 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

C.11.4 C GST + Seller-Assessed PST (not calculated as a tax on a tax)

Figure C-34 Speed Voucher Entry

Description of Figure C-34 follows
Description of "Figure C-34 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-35 General Ledger Post - Voucher Entry report

Description of Figure C-35 follows
Description of "Figure C-35 General Ledger Post - Voucher Entry report"

GST = $1000 goods x .07 tax rate = $70

PST = $1000 goods x .08 tax rate = $80

Dr 1080 G/L distribution

$1080 = $1000 goods + $80 PST

Dr 70 GST receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Cr 1150 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1150 = $1000 goods + $70 GST + $80 PST

C.11.5 C GST + Seller-Assessed PST (calculated as a tax on a tax)

Figure C-36 Speed Voucher Entry

Description of Figure C-36 follows
Description of "Figure C-36 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-37 General Ledger Post - Voucher Entry report

Description of Figure C-37 follows
Description of "Figure C-37 General Ledger Post - Voucher Entry report"

GST = $1000 goods x .07 tax rate = $70

PST = ($1000 goods + $70 GST) x .08 tax rate =$85.60

Dr 1085.60 G/L distribution 

$1085.60 = $1000 goods + $85.60 PST

Dr 70.00 GST receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Cr 1155.60 Accounts payable account 1.4110

This is that account that AAI item PCxxxx points to.

$1155.60 = $1000 goods +$70 GST + $85.60 PST

C.11.6 CT GST + Seller-Assessed PST (tax only)

Figure C-38 Speed Voucher Entry

Description of Figure C-38 follows
Description of "Figure C-38 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-39 General Ledger Post - Voucher Entry report

Description of Figure C-39 follows
Description of "Figure C-39 General Ledger Post - Voucher Entry report"

GST =$150 tax x (.07/.15) = $70

PST = $150 tax x (.08/.15) = $80

Dr 80 G/L distribution

$80 = $80 PST

Dr 70 GST receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

$70 =$70 GST

Cr 50 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$150 = $70 GST + $80 PST

C.11.7 GST Input Credits

Credits for V (VAT)

Figure C-40 Speed Voucher Entry

Description of Figure C-40 follows
Description of "Figure C-40 Speed Voucher Entry "

The system posts the transaction above as shown on the report below.

Figure C-41 General Ledger Post - Voucher Entry report

Description of Figure C-41 follows
Description of "Figure C-41 General Ledger Post - Voucher Entry report"

VAT1 = $1000 goods x .07 tax rate = $70

VAT2 = $1000 goods x .08 tax rate = $80

Non-recoverable = $1000 goods x .15 tax rate x .30 = $45

Recoverable = $70 VAT1 - $45 non-recoverable = $25

Dr 1045 G/L distribution

$1045 = $1000 goods + $45 non-recoverable VAT

Dr 25 VAT receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Dr 80 VAT receivable account 1.1240.B

This is the account that AAI item PTVAT2 points to.

Cr 1150 Accounts payable account 1.14110

This is the account that AAI item PCxxxx points to.

$1150 = $1000 goods + $70 VAT1 +$80 VAT2

Credits for B (GST + Self-Assessed PST)

Figure C-42 Speed Voucher Entry

Description of Figure C-42 follows
Description of "Figure C-42 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-43 General Ledger Post - Voucher Entry report

Description of Figure C-43 follows
Description of "Figure C-43 General Ledger Post - Voucher Entry report"

GST = $1000 goods x .07 tax rate = $70

PST = $1000 goods x .08 tax rate = $80

Non-recoverable = $70 GST x .30 = $21

Recoverable = $70 GST - $21 non-recoverable = $49

Dr 1101 G/L distribution

$1101 = $1000 goods + $80 PST + $21 non-recoverable GST

Dr 49 VAT receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Cr 80 Self-assessed tax payable account 1.4423.AREA3.

This is the account that AAI item PT_ _ _ _ points to (business unit and object

1.4423) plus the subsidiary account identifying the tax rate/area (Area3).

Cr 1070 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1070 = $1000 goods + $70 GST

Credits for C (GST + Seller-Assessed PST)

Figure C-44 Speed Voucher Entry

Description of Figure C-44 follows
Description of "Figure C-44 Speed Voucher Entry"

The system posts the transaction above as shown on the report below.

Figure C-45 General Ledger Post - Voucher Entry report

Description of Figure C-45 follows
Description of "Figure C-45 General Ledger Post - Voucher Entry report"

GST = $1000 goods x .07 tax rate = $70

PST = $1000 goods x .08 tax rate = $80

Non-recoverable = $70 GST x .30 = $21

Recoverable = $70 GST - $21 non-recoverable = $49

Dr 1101 G/L distribution

$1101 = $1000 goods + $80 PST + $21 non-recoverable GST

Dr 49 VAT receivable account 1.1240.A

This is the account that AAI item PTVAT1 points to.

Cr 1150 Accounts payable account 1.4110

This is the account that AAI item PCxxxx points to.

$1150 = $1000 goods + $70 GST + $80 PST