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Tax zones / Categories default to customer & vendor settings

  • 21 April 2021
  • 4 replies
  • 950 views

Hi all...perhaps someone can share some ideas on following TAX (VAT) issues.

To be able to create a meaningful tax report i have created 3 different tax zones and tax categories

Tax zone 01 / category 01 = local purchase and sales on 15% VAT. All stock items are set to this category, all good in this scenario.

Tax zone 02 / category 02 = all foreign customers (exports) set to tax zone 02 / category 02, this category is set to 0% VAT

Tax zone 03 / category 03 = all foreign vendors (imports)  set to tax zone 03 / category 03, this category is set to 0% VAT

The VAT for imports is paid by the customs clearing agency and invoiced as 'Custom VAT" together with other charges to us. 

In our tax report we need to show the total value of imports and total value of exports for the tax period.

In my opinion the tax setting of the foreign customer and vendor should have priority over the tax setting of the stock item.

Currently you have to go to each line item and manually change the category to 02 or 03 to get the correct values in the report.

This is not very efficient with a huge potential to miss some changes which will mess up the tax report.

Any suggestions how to solve this problem would be highly appreciated.

Best regards, Franz

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Best answer by Olga Anisimovich 19 June 2021, 10:21

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4 replies

Thank you for you replies,

Like tiany mentioned in the reply above the vendor and customer settings should have priority over the item settings. If not setting has been entered than the default tax ID setting like it is now should be used.

If there is a different setting on a vendor or customer profile than that ID should override the default setting.

 

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@fjm61 

In your case, I would probably configure two tax zones (Domestic and International) and assign the local customers and vendors to the Domestic zones and the foreign ones to the International zone.

If all the items you sell locally are subjected to VAT 15%, then you probably need to configure a single tax category TAXABLE and assign it to the inventory items. Also, you may want to select it as a default category for the both tax zones on the Tax Zones form. Then the system will use it by default in the document lines without inventory item specified.

VAT 15% needs to be included in the Domestic tax zone and in the Taxable tax category; input VAT 0% and output VAT 0% should be included in the to the International zone and in the Taxable tax category.

With the configuration described above, you won’t need to select the tax zones or tax categories manually in the documents. The system will take the tax zone from the customer or vendor and the tax category from the item (or it will the default tax category set for the tax zone, if the item is not selected).

The taxes included into the both tax zone and the tax category will be calculated for the line. You can review the calculated taxes on the Tax Details tab on the data entry forms.

Good day, I agree with the above statement from Tiany, vendor and customer settings should have priority over the item settings

In my opinion the tax setting of the foreign customer and vendor should have priority over the tax setting of the stock item.

NO, documents use intersection between Tax zone and Tax categroy

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