When an overpayment is offset, the credit is used to extinguish other debts. The order of allocation of overpayment amount to debt depends on the tax authority's rules. Typically, the credit is applied in the following order:
Within the same assessment
Other assessments within the obligation
Other obligations under the same account
Other accounts for the taxpayer
In some cases, a tax authority may also allow offsetting against debt from other agencies. This type of debt is called external debt.
Where offset is possible, it is done before attempting to contribute, carry forward or refund. Offset is not allowed on future obligations, but a carry forward is done instead.
Refer to the base business objects for algorithms supplied to offset credit to other obligations.
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