Set Up Golden Tax System Options for China

Use Manage Golden Tax System Options for China task to define setup information for each legal reporting unit. The Chinese VAT regime enforces limitations for maximum amounts and maximum memo lines for all VAT invoices.

If an AR invoice exceeds these limits, then it must be split into multiple VAT invoices. You can define these limitations in the System Options task.

Follow these steps:

1. Click Navigator, Setup and Maintenance, Manage Golden Tax System Options for China
2. Select VAT Related Options tab. Complete these fields:
   • Tax Registration Number

     This is the transaction tax registration number of the legal reporting unit that is issuing the VAT invoice. In Legal Reporting Unit Tax Profile, you can define the tax registration number for a legal reporting unit. A legal reporting unit can be a legal entity, an operating unit, an inventory organization (warehouse), or a location.

   • Invoice Type. Select one of these VAT invoice types:
     • Special VAT Invoice: When a sale is made to a General Taxpayer, the Special VAT Invoice is issued.
     • Common VAT Invoice: If the sale is made to a Small-Scale Taxpayer, the Common VAT Invoice is issued.
   • Maximum Invoice Amount (CNY): The maximum CNY amount allowed on a single VAT invoice. This limit is specified by the Chinese VAT regime for the legal reporting unit with the specified tax registration number.
   • Maximum Invoice Lines: The maximum lines allowed on a single VAT invoice. This limit is specified by the Chinese VAT regime for the legal reporting unit with the specified tax registration number.
   • Tax Type: This value indicates the Chinese VAT tax type. In China, VAT invoices must be created only when VAT is applicable; VAT invoices are not generated for other tax types. Receivables invoices with tax lines belonging only to this tax type are transferred to the Golden Tax Adaptor.
   • Descriptive Flexfield Assignments: In this region, define the contexts and attributes of the Inventory Item Descriptive flexfield that are configured for capturing and storing these additional Golden Tax attributes:
     • Item Model
     • Tax Denomination

   Note: These attributes are optional for generating VAT invoices. You can set up these flexfields as needed.
3. Select VAT Related Options tab. Complete these fields:
   • Split Rules: Specify how to split when transfer AR transaction to Golden Tax Adaptor if invoice amount is more than maximum amount limit.
   • Split Transaction Line: This attribute indicates how a receivables invoice should be split when the invoice amount exceeds the maximum amount limit. If the attribute is selected, then an invoice line is split and distributed between two child invoices. Otherwise, the entire invoice line is moved to the next child invoice. This example shows a receivables invoice with two lines:

   Line No.	Line Amount (CNY)
   1	6000
   2	7000

   The maximum amount limit is 10000 CNY. In this example, if the attribute is selected, then the invoice is split into two child invoices as shown by these examples:

   1st Invoice:

   Line No.	Line Amount (CNY)
   1	6000
   2	4000

   2nd Invoice:

   Line No.	Line Amount (CNY)
   1	3000

   If the attribute is not selected, then the entire line amount (7000 CNY) is shifted to the second child invoice. However, if the invoice line amount itself exceeds the maximum amount limit, then it is always split.

   • Allow Unit Price Exceeding VAT Invoice Amount Limit: This attribute indicates whether a transaction line should be split when its unit price exceeds the maximum amount limit. If the attribute is selected, then a transaction line is split to several invoices with decimal item quantity. This example shows a receivables invoice with two lines:

   Line No.	Item Quantity	Line Amount (CNY)
   1	1	6000
   2	1	12000

   The maximum amount limit is 10000 CNY. In this example, if the attribute is selected, then the invoice is split into two invoices as shown by these examples:

   1st Invoice:

   Line No.	Item Quantity	Line Amount (CNY)
   1	1	6000
   2	.33333333	4000

   2nd Invoice:

   Line No.	Item Quantity	Line Amount (CNY)
   1	.66666667	8000

   If the attribute is not selected, then the invoice is not transferred, and an exception is generated.

   • Item Description Source: In this region, define whether the item cross reference functionality is applicable, and indicate how the item description that prints on the VAT invoice is derived. If you select Receivables Transaction, then the item description on the receivables transaction line is transferred to the Golden Tax Adaptor; if you select Item Cross Reference, the item cross reference functionality is applicable, you need to select the crossreference type to specify which item description is to be printed on the VAT invoices.

   • Use item description if no reference exists: This is applicable if you have selected that Item Cross Reference should be used, but you have not defined the cross reference for an item. Select this check box if you want to transfer the item description on the master item. If a cross reference is not defined for an item and this attribute is not selected, then that receivables invoice is not transferred to the Golden Tax Adaptor, and an exception message displays on the report that is created when you submit Transfer Transactions to Golden Tax Adaptor for China process. You can then define a cross reference for the specific item and run the transfer.

   • Use latest reference if multiple references exist: This is applicable when you have selected Item Cross Reference, but a specific item has multiple cross references defined against it under the cross-reference type indicated on this page. If this check box is selected, then the most recent cross reference is transferred to the Golden Tax Adaptor. When multiple cross references exist for an item and this check box is not selected, then that receivables transaction is not transferred to the Golden Tax Adaptor, and an exception message displays on the report that is created when you when you submit Transfer Transactions to Golden Tax Adaptor for China process. You can resolve the exception by deleting the invalid cross references and run the transfer.
   • Batch Numbering: Select Automatic or Manual for batch number entry. This batch numbering refers to the batches created when the Golden Tax Adaptor data is exported to a data file from the workbench or when using the Golden Tax Invoice Export process. When automatic, specify Staring Batch Number.
4. Click Save to save your changes.