Tax Calculation on Payables Transactions Using Tax Point Basis
Taxes are calculated on payables transactions using the tax point basis, the type of transaction and matching criteria.
Following are the payables transactions with varying matching scenarios that are subject to tax determination:
-
Unmatched invoice
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Invoice matched with a purchase order
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Invoice matched with a receipt
-
Invoice matched with a consumption advice
-
Correction invoice
Unmatched Invoice
Taxes are calculated on the invoice based on the tax attributes.
Invoice Matched with a Purchase Order
Taxes are calculated on the invoice based on the tax attributes. If the option Enforce tax from reference document is enabled, the invoice uses the tax rate code on the purchase order and the corresponding rate period on the invoice date. The difference between purchase order taxes and invoice taxes is recorded using tax variance distributions.
Invoice Matched with a Receipt
Taxes are initially calculated on the invoice based on the tax attributes. When the tax point basis is Invoice, Accounting, or Payment, no further processing is required. When the tax point basis is Delivery, the delivery-based tax is reprocessed based on the configuration owner tax options and the receipt accounting status, as follows.
Allow Delivery-Based Tax Calculation |
Report Delivery-Based Taxes on |
Tax Point Date |
Result |
---|---|---|---|
Not enabled |
New tax point basis is Invoice. |
||
Enabled |
Receipt |
Receipt date |
If receipt accounting is:
|
Enabled |
Invoice |
Receipt date |
Tax is recalculated using the receipt date as the transaction date and marked as reportable on the invoice. |
Enabled |
Invoice |
Invoice date |
Tax is marked as reportable on the invoice. |
The difference between receipt taxes and invoice taxes is recorded using tax variance distributions. If taxes are not configured for receipts, then the corresponding purchase order taxes are used for calculating the tax variance distributions.
Invoice Matched with a Consumption Advice
Taxes are calculated on the transaction line based on tax attributes. All delivery-based taxes on the consumption transaction are prorated on the invoice.
Correction Invoice
The tax determination process copies the taxes from the original invoice. The tax point basis of Delivery on the tax is updated to Invoice, and marked as reportable.