Example of Reporting Input Taxes in the Nonrecoverable Tax Register and Recoverable Tax Register
The following scenario illustrates the reporting differences between the Nonrecoverable Tax Register and the Recoverable Tax Register for recoverable and nonrecoverable taxes.
Payables Invoices
The following table shows the accounting entries for an Oracle Fusion Payables invoice (AP-Inv-Test3) with a fully recoverable tax and a partially recoverable tax.
|
Account |
Debit Amount |
Credit Amount |
Description |
|---|---|---|---|
|
Expense |
600.00 |
Net expense amount taxed at 10% |
|
|
Tax |
60.00 |
Tax at 10% is fully recoverable |
|
|
Expense |
400.00 |
Net expense amount taxed at 20% |
|
|
Expense |
32.00 |
40% of 80.00 (400.00 * 20%) is nonrecoverable |
|
|
Tax |
48.00 |
60% of 80.00 (400.00 * 20%) is recoverable |
|
|
Liability |
1140.00 |
The following table shows the accounting entries for the Payables invoice AP-Inv-Test4.
|
Account |
Debit Amount |
Credit Amount |
Description |
|---|---|---|---|
|
Expense |
600.00 |
Net expense amount taxed at 10% |
|
|
Tax |
60.00 |
Tax at 10% is nonrecoverable |
|
|
Expense |
400.00 |
Net expense amount taxed at 20% |
|
|
Tax |
80.00 |
Tax at 20% is nonrecoverable |
|
|
Liability |
1140.00 |
Tax Register
For the 10 percent tax, the Tax Register shows:
|
Transaction Number |
Transaction Class |
Taxable Amount |
Recoverable Tax Amount |
Nonrecoverable Tax Amount |
|---|---|---|---|---|
|
AP-Inv-Test3 |
Invoice |
600.00 |
60.00 |
0.00 |
For the 20 percent tax, the Tax Register shows:
|
Transaction Number |
Transaction Class |
Taxable Amount |
Recoverable Tax Amount |
Nonrecoverable Tax Amount |
|---|---|---|---|---|
|
AP-Inv-Test3 |
Invoice |
400.00 |
48.00 |
32.00 |
AP-Inv-Test 4 does not appear in the tax register because it only contained nonrecoverable taxes.
Nonrecoverable Tax Register
For the 10 percent tax, the Nonrecoverable Tax Register shows:
|
Transaction Number |
Transaction Class |
Taxable Amount |
Recoverable Tax Amount |
Nonrecoverable Tax Amount |
|---|---|---|---|---|
|
AP-Inv-Test4 |
Invoice |
600.00 |
0.00 |
60.00 |
For the 20 percent tax, the Nonrecoverable Tax Register shows:
|
Transaction Number |
Transaction Class |
Taxable Amount |
Recoverable Tax Amount |
Nonrecoverable Tax Amount |
|---|---|---|---|---|
|
AP-Inv-Test3 |
Invoice |
400.00 |
48.00 |
32.00 |
|
AP-Inv-Test4 |
Invoice |
400.00 |
0.00 |
80.00 |