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