Taxes and Pre-Invoices

Pre-Invoices and their associated regular invoices can include tax amounts.

For projects with taxes, you include tax amounts on both the pre-invoices and the regular (draft and final) invoices that the pre-invoices are applied to. You should enter the same tax code on a regular invoice as was entered on the pre-invoices that are being applied to it.

• For pre-invoices, taxes are calculated based on tax information that is entered in Billing Terms at the project (WBS1) level or at the main project level for billing groups.
• For regular invoices, the taxes are calculated after any paid pre-invoice fee amounts are applied to it.

Tax amounts are not included in the amounts listed in the Pre-Invoice section on a pre-invoice, regular invoice, or pre-invoice cancellation invoice. The amounts in the Pre-Invoice section are fee amounts.

The following is an example of a pre-invoice with taxes and the regular invoice that the pre-invoice is applied to.

Table 1. Pre-Invoice

Amount Type	Pre-Invoice Total
Fee	$30,000
Tax at 10%	$3,000
	======
	$33,000

Table 2. Regular Invoice with the Paid Pre-Invoice Applied

Amount Type	Regular Invoice Gross Amount	Less Paid Pre-Invoice Amount	Regular Invoice Total
Fee	$80,000	$30,000	$50,000
Taxes at 10%			$5,000
			=======
			$55,000

The tax is calculated for the regular invoice after the paid pre-invoice fee amount is deducted from it. This is 10% of $50,000 ($80,000 - $30,000). Taxes were previously calculated and collected for the $30,000 on the pre-invoice.