Draft Optimization (Stamp Tax Minimization)

Draft optimization, or stamp tax minimization, is primarily applied to Japanese domestic drafts and is performed during the Draft Staging process. Stamp tax minimization reduces tax liability by splitting draft payments and determining the optimum number and denominations of drafts. Currently, stamp tax minimization uses the Japanese yen as the payment currency, and it uses the current Stamp Tax table, which is updated by Japan's Ministry of Finance to determine the stamp tax amount. You maintain the Stamp Tax table on the Stamp Tax page.

During draft staging, PeopleSoft Payables summarizes the payment schedule information, based on the criteria that you specify in the pay cycle selection criteria. The system determines the optimal number of drafts by using the draft master amount, the Stamp Tax table, and the maximum number of drafts that you specify. The Draft Staging process runs draft rounding, if applicable, and then runs stamp tax minimization. Drafts are then put into the staging table.

Note:

Specify the Group Code on the Draft Maturity Date page to group payment schedules manually into one draft. Select the Separate Payment check box on the Additional Payables Options collapsible region on the Supplier Information - Payables Options page to create one draft for one payment schedule. You can preview, approve, or reject split draft payments on the Draft Staging Approval page.