VAT + Sales Tax (C) - Voucher and Invoice Entry
When you enter a voucher or invoice using tax explanation code C for VAT + sales tax, the system calculates the sales tax amount but does not create a separate entry to the general ledger. For vouchers, the sales tax is part of the expense, so you do not need to enter the tax in a specific account. For invoices, however, you might want to track the sales tax in a separate account because you must pay it. In this instance, you would need to subtract the sales tax amount from the revenue and enter it separately. The system records the VAT amount when you post the transaction. In accounts payable, you offset the VAT Recoverable Tax account when you receive payment from the tax authority. In accounts receivable, you offset the VAT Payables account when you pay the tax.
This example displays the AAI that the system uses and the tables and accounts that the system updates when you enter and post a voucher or invoice. The examples are for a taxable amount of 1,000 USD with a 7 percent VAT and 3 percent sales tax rate.
Example: Voucher Entry
Program |
AAI* |
Table |
Accounts & Fields Updated |
F0911 DR |
F0911 CR |
|---|---|---|---|---|---|
Standard Voucher Entry (P0411) Creates a voucher |
. |
F0411 . F0911 |
Taxable (1,000) Tax (100) Gross (1,100) Expense |
. . . 1,030 |
. |
Post General Ledger (R09801) Posts the voucher to the general ledger |
FIN - PTxxxx FIN - PC |
F0911 |
VAT Recoverable Tax AP Trade |
70 |
. 1,100 |
Example: Invoice Entry
Program |
AAI* |
Table |
Accounts & Fields Updated |
F0911 DR |
F0911 CR |
|---|---|---|---|---|---|
Standard Invoice Entry (P03B11) Creates an invoice |
. |
F03B11 . F0911 |
Taxable (1,000) Tax (100) Gross (1,100) Revenue Sales Tax |
. |
. . . 1,000 30 |
Post General Ledger (R09801) Posts the invoice to the general ledger |
FIN - RTxxxx FIN - RC |
F0911 |
VAT Payables AR Trade |
. 1,100 |
70 |
* DM - AAI = Distribution/Manufacturing AAI (F4950); FIN - AAI = Financial AAI (F0012)
If you use tax-on-tax calculations, which you specify in the tax rate/area by activating the Compound Tax field, the system uses this formula to calculate the tax amount:
(Taxable + VAT) x sales tax rate = Tax
(1,000 + 70) x .03 = 32.10