19 Work with the Tax Reconciliation Workfile

This chapter contains these topics:

Section 19.1, "Working with the Tax Reconciliation Workfile,"
Section 19.2, "Creating the Tax Reconciliation Workfile,"
Section 19.3, "Revising the Tax Reconciliation Workfile."

19.1 Working with the Tax Reconciliation Workfile

After you enter your transactions with tax information, you can use J.D. Edwards base software to build the tax reconciliation workfile. The workfile contains the tax information that you need to reconcile consumption tax with its original revenue and expense so that you can complete a consumption tax report.

Working with the tax reconciliation consists of the following tasks:

Creating the tax reconciliation workfile
Revising the tax reconciliation workfile (optional)

19.2 Creating the Tax Reconciliation Workfile

Navigation

From General Systems (G00), choose Tax Processing and Reporting

From Tax Processing and Reporting (G0021), choose Japanese Consumption Tax

From Japanese Consumption Tax (G00212), choose Build Consumption Tax Workfile

After you set up your system to process tax reconciliation and enter your transactions, you can run the Tax Reconciliation Workfile Build program to create the Tax Reconciliation workfile (F00189).

The Tax Reconciliation workfile contains information that links detailed tax records from the Sales/Use/VAT Tax File file (F0018) with their original revenue or expense accounts in the Account Ledger file (F0911). You can use this information to report your consumption tax against the revenue or expense that originally generated the tax.

A transaction can consist of multiple pay items. You can distribute each pay item in a transaction to one or more accounts. The system reconciles taxes against the revenue or expense that originally generated the tax based on the pay item that you associate with each line of distribution.

To reconcile tax against the revenue or expense that originally generated the tax, you must indicate the pay item associated with each line of distribution.

The system stores the tax details for each transaction in the Sales/Use/VAT Tax File file (F0018). The tax detail record for each pay item in a transaction includes the following information:

Tax type
Tax area
Taxing authority
Tax basis
Taxable components of the gross amount
Nontaxable components of the gross amount
Taxable amount

The system stores the account distribution information for each transaction in the Account Ledger file (F0911).

When you run the Tax Reconciliation Workfile Build program, the system creates records in the Tax Reconciliation Workfile. The records are based on each pay item distribution's percentage of the whole transaction.

The following tables illustrate how the system creates Tax Reconciliation Workfile records from the transaction records in the Account Ledger file (F0911) and the corresponding tax detail records in the Sales/Use/VAT Tax File file (F0018).

Use/Sales/VAT Tax File (F0018) Record

Doc Number	Doc Type	Pay Item/Suffix	Taxable	Tax	Non taxable
123	PV	000	500	50	0
123	PV	001	2000	200	0

Account Ledger File (F0911) Record

Doc Number	Doc Type	Pay Item/Suffix	Account	Amount
123	PV	000	1111.1	2000
123	PV	000	2222.2	300
123	PV	001	3333.3	500
123	PV	001	4444.4	600
123	PV	001	5555.5	900

Tax Reconciliation Workfile (F00189) Record

Doc Number	Doc Type	Pay Item/Suffix	Account	Taxable	Tax
123	PV	000	1111.1	200	20
123	PV	000	2222.2	300	30
123	PV	001	3333.3	500	50
123	PV	001	4444.4	600	60
123	PV	001	5555.5	900	90

19.3 Revising the Tax Reconciliation Workfile

Navigation

From General Systems (G00), choose Tax Processing and Reporting

From Tax Processing and Reporting (G0021), choose Japanese Consumption Tax

From Japanese Consumption Tax (G00212), choose Direct Workfile Adjustment

When you create the Tax Reconciliation Workfile (F00189), the system balances the entries in the workfile for all the journal entries that are generated by the system. In the case of manual entries, the generation program might create an unbalanced workfile because of data entry errors. When this happens, two situations can result:

Situation	Explanation
Tax balance exceeds the ledger balance	If the balance of the Sales/Use/VAT Tax records exceeds the balance of the Account Ledger records, the system creates an extra record in the Tax Reconciliation Workfile (F00189) and assigns the unbalanced amount to a blank account number.
Ledger balance exceeds the tax balance	If the balance of the Account Ledger records exceeds the balance of the Sales/Use/VAT Tax records, the system prints the unbalanced amount for each pay item in the F0911 record to a special field in the workfile called Unbalanced Tax Amount.

The system prints both types of errors on a World Writer report that is designed to highlight errors in the Tax Reconciliation Workfile.

If the Tax Reconciliation Workfile is not in balance, you can revise the workfile manually to correct any errors. Use the Direct Workfile Adjustment program to change or update records in the Tax Reconciliation Workfile to support your reporting requirements.

You cannot use the Direct Workfile Adjustment program to add or delete records in the Tax Reconciliation Workfile.

To revise the Tax Reconciliation Workfile

On Direct Workfile Adjustment

Figure 19-1 Direct Workfile Adjustment screen

Description of "Figure 19-1 Direct Workfile Adjustment screen"

To locate a workfile record, complete the following fields:
- Document Type
- Document Number
- Document Company

To change the workfile record, complete the following fields:

Pay Item
Taxable Amount
Tax Amount
Unbalanced Taxable
Unbalanced Tax

Field	Explanation
Document Type	A user defined code (system 00/type DT) that identifies the origin and purpose of the transaction. J.D. Edwards reserves several prefixes for document types, such as vouchers, invoices, receipts, and timesheets. The reserved document type prefixes for codes are: P Accounts payable documents R Accounts receivable documents T Payroll documents I Inventory documents O Order processing documents J General ledger/joint interest billing documents The system creates offsetting entries as appropriate for these document types when you post batches.
Document Number	A number that identifies the original document, such as a voucher, invoice, unapplied cash, journal entry, and so on. On entry forms, you can assign the original document number or let the system assign it through Next Numbers. Matching document (DOCM) numbers identify related documents in the Accounts Receivable and Accounts Payable systems. Examples: Automated/Manual Payment Original document - Voucher Matching document - Payment A/R Original Invoice Original document - Invoice Receipt Application Original document - Invoice Matching document - Receipt Credit Memo/Adjustment Original document - Invoice Matching document - Credit Memo Unapplied Receipt Original document - Receipt
Document Company	A code that identifies a specific organization, fund, entity, and so on. This code must already exist in the Company Constants file (F0010). It must identify a reporting entity that has a complete balance sheet. At this level, you can have intercompany transactions. NOTE: You can use company 00000 for default values, such as dates and automatic accounting instructions (AAIs). You cannot use it for transaction entries.
Pay Itm	A number that identifies the pay item for a voucher or an invoice. The system assigns the pay item number. If the voucher or invoice has multiple pay items, the numbers are sequential.
Taxable Amount	The amount on which taxes are assessed.
Tax Amount	This is the amount assessed and payable to tax authorities. It is the total of the VAT, use, and sales taxes (PST).
Un-balanced Taxable	This is used in Consumption Tax Report to collect the un-balanced taxable amount from the Tax file (F0018) or the Account Ledger file (F0911). This field should be zero when the amounts from the two files are equal for the same Document Type, Document Number and Pay Item.
Un-balanced Tax	This is used in Consumption Tax Report to collect the un-allocated tax amount from the Tax file (F0018). This field should be zero when the tax amount for the same Document Type, Document Number and Pay Item is distributed to every account in the Account Ledger file (F0911).