Options Tab of the Tax Codes Settings Form
Use this tab to set up tax codes for calculating taxes throughout Vantagepoint.
This tab contains different content based on whether or not you set Enable Tax Auditing Feature to Yes in . When you set it to Yes, you can enter certain input taxes and report on taxes from billing invoices and purchase orders, and the following additional items display on this tab:
- Tax Code to Include in Basis field
- Low Threshold Rate field
- High Threshold Rate field
- Tax Currency field if you use multiple currencies
- Tax Region field
- Inputs section
- Non-Recoverable Tax section
Fields
| Field | Description | ||||||||||||||||
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| Code | Enter a code (up to ten alpha and/or numeric characters) by which to identify this tax. The tax code displays in the drop-down list in tax code fields throughout Vantagepoint, so you can apply taxes to AP voucher items, expense report items, billing invoices, and so on. | ||||||||||||||||
| Tax Rate | Enter the rate at which to apply this tax. For example, if the rate is 5%, enter 5 in this field (not .05). | ||||||||||||||||
| Status | Select one of the following statuses for a tax code:
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| Tax Code to Include in Basis |
This field displays if you set Enable Tax Auditing Feature to Yes in . This field applies for compound taxes. For compound taxes, two or more taxes are calculated, and some of the taxes are generated on other taxes. Compound taxes are calculated on a "basis" amount that is the sum of the original amount being taxed plus the tax amount calculated for another applied tax. For example, in Canada, a product could have a federal tax and a provincial tax. The provincial tax is calculated after the federal tax is calculated. The provincial tax is applied to the product price plus the federal tax amount that was calculated for the product price. From the drop-down list, select the tax to include in the basis amount for this tax code. It is the tax that will be taxed. The compound taxes are calculated automatically only when all of the taxes involved in a compound tax are entered for a transaction. To see examples of compound taxes and which tax you enter in the Tax Code to Include in Basis field, see the "Compound Tax Examples" topic.
Vantagepoint does not support compound taxes when the tax code to include in the basis creates a circular reference. This will lead to unexpected results. Example:
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| Low Threshold Rate |
This field displays if you set Enable Tax Auditing Feature to Yes in . Enter the lowest tax rate to limit what users can enter when they override the default tax rates in . The taxes entered in Transaction Entry are used to calculate tax amounts for AP vouchers, AP disbursements, employee expenses, cash receipts, cash disbursements, invoices, and journal entries. |
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| Tax Currency | This field displays if you use multiple currencies and you set Enable Tax Auditing Feature to Yes in . Select the currency that applies for this tax code. The tax currencies that are included in the drop-down list include all the currencies that are enabled for the active company. This allows you to run reports, including the Tax Analysis report, in the currency of the tax code. Even if the tax currency is the same as the functional currency, you must enter the currency in order to run tax reports in a single currency. | ||||||||||||||||
| High Threshold Rate | This field displays if you set Enable Tax Auditing Feature to Yes in . Enter the highest tax rate to expand what users can enter when they override the default tax rates in . The taxes entered in Transaction Entry are used to calculate tax amounts for AP vouchers, AP disbursements, employee expenses, cash receipts, cash disbursements, invoices, and journal entries. | ||||||||||||||||
| Tax Region |
Select a tax region for the tax code. The drop-down list includes the tax regions that you set up in . Specifying a tax region allows the drop-down list in the Tax Code fields in AP voucher entry, AP disbursement entry, and invoice billing terms to include only the tax codes that are appropriate for the vendor or client's specific address that you enter for the transaction or billing terms. The appropriate tax codes are based on the vendor and client's tax country (entered in the Firms hub) and a tax code's region, which is associated with a country. |
at the end of a row for a category in the Categories for all Expense Groups grid on the Expense Categories form
Inputs Section
This section displays only if you set Enable Tax Auditing Feature to Yes in . This section applies if you use the tax code as an input tax. Input taxes are applied to accounts payable vouchers, accounts payable disbursements, employee expenses, cash disbursements, and journal entries in the Transaction Center and to expense reports.
Select the areas in Vantagepoint in which the tax codes can be used. The tax code is then included in the drop-down list for the tax fields in those entry areas.
| Field | Description | ||||||||||||||||
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| Transaction Entry |
Select this check box to make this tax code available for the following:
For a tax code to be available for cash receipts and billing invoices in the Transaction Entry, you must set it up as both an input and output tax (with the Transaction Entry check box selected in the Inputs section) or set it up as an output only tax code. If you clear the Transaction Entry check box after you have selected it, the Available for Purchasing check box is also cleared. If you try to clear the Transaction Entry check box and there is a tax code entered in any of the default tax code fields in various places in Vantagepoint, you receive an error message. You must remove the default tax codes in these locations before you can clear the Transaction Center check box. The default tax codes are entered in the following locations:
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| Employee Expenses |
Select this check box to make this tax code available for expense reports that you enter in . If you clear the Employee Expenses check box after you have selected it, and there are tax codes entered in the Default Tax Code grid on the Expense Report Categories form in , you receive an error. You must remove the tax codes that are entered on the Expense Report Categories form before you can clear the Employee Expense check box. |
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| Available for Purchasing |
This check box displays if you have the Purchasing application installed. Select this check box to make the tax code available for ship-to addresses for purchase orders. This allows a tax code to auto fill for an accounts payable voucher that you create from a purchase order, based on the ship-to address entered for the purchase order. When you select this check box:
If you clear the Available for Purchasing check box after you have selected it, and there is a tax code entered in the Tax Code and/or Tax-2 Code fields on the Ship tab in in the desktop application, you receive an error. You must remove the tax codes on the Ship tab before you can clear the Available for Purchasing check box. When Enable Tax Auditing Feature is set to No in , the Available for Purchasing check box displays to the right of the Outputs section instead of in the Inputs section. |
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| Input Account | This field is enabled only if you select one of the check boxes in the Inputs section. Select a general ledger account (typically a debit account) for this tax code. You must enter an account in this field if any of the check boxes in the Outputs section are selected.
Warning: If the input account is missing for any tax code that requires it, you will not be able to post transactions.
This account is used when this tax code is applied for the type of entries that are associated with the check boxes (Available for Purchasing, Transaction Entry, and Employee Expenses) that you selected in this section. |
Outputs Section
This section is not enabled if you make entries in the Non-Recoverable Tax section on this tab.
Use the Outputs section if you plan to use a tax code for an output tax. Output taxes are applied to billing invoices. Select the specific invoice charges for which the tax code applies. The tax code is then included in the drop-down list for tax fields in the invoice charge entry areas.
When the Tax Auditing feature is turned off, the tax codes that you set up as output taxes in this section can be applied only to invoices created in Billing.
When the Tax Auditing feature is turned on, the tax codes that you set up as output taxes can be applied to invoices created in Billing, as well as invoices and cash receipts that you enter in . For a tax code to be available for invoice entry or cash receipt entry in Transaction Entry, you can set it up as either of the following:
- An output only tax: It must have at least one of the check boxes selected in the Outputs section.
- An input and output tax: It must have at least one of the check boxes selected in the Outputs section and the Transaction Entry check box selected in the Inputs section.
- Billing Terms, Interactive Billing, and Batch Billing in Billing
- Default Terms in Billing Configuration
- Cash Receipts in Transaction Entry
- Invoices in Transaction Entry
| Field | Description |
|---|---|
| Labor Billing | Select this check box if the tax applies to billing labor charges. |
| Expense Billing | Select this check box if the tax applies to billing expense charges. |
| Consultant Billing | Select this check box if the tax applies to billing consultant charges. |
| Fee Billing | Select this check box if the tax applies to billing fee charges. |
| Unit Billing | Select this check box if the tax applies to billing unit charges. |
| Add-on Billing | Select this check box if the tax applies to billing add-on charges. |
| Output Account | This field is enabled only if you select a check box in the Outputs section. Select a general ledger account (typically a credit account) for this tax code. The name of the account displays below the
Account field.
You must specify an account in this field if any of the check boxes are selected in the Outputs section or in the Tax Applies To group on the Intercompany Billing tab of the Tax Codes form if you use multiple companies and intercompany billing. This account is used when this tax code is applied to the specific part of a billing invoice that is associated with the check box that you selected in the Output section. If you enter a liability account in this field, Vantagepoint excludes the sales tax amount from project billings or revenue figures. The typical general ledger entry following the invoice posting would be a cash disbursement that debits the Sales Tax Payable account (the account that you enter in this field). If you enter a revenue account in this field, your project revenue is higher after you post the invoice. |
Non-Recoverable Tax Section
This section applies if you need to account for both the recoverable and the non-recoverable portions of a tax (such as for the Canadian HST tax) or if you need to use a reverse charge tax.
This section is enabled if the following apply:
- Enable Tax Auditing Feature is set to Yes in .
- You do not select any check boxes in the Outputs section on this tab or in the Tax Applies To section on the Intercompany Billing tab on the Tax Codes form.
Non-Recoverable Taxes
Non-recoverable taxes:
- Apply only for input taxes (tax codes that have no check boxes selected in the Outputs section on this tab)
- Can be applied for AP vouchers, AP disbursements, cash disbursements, journal entries, and employee expenses in the Transaction Center and for expense reports in Time & Expense. These transactions can have more than one non-recoverable tax code.
- Are calculated for a transaction and applied to the general ledger accounts when you post a transaction. The tax amounts are not displayed on the entry form in Vantagepoint. You have the option to display both recoverable and non-recoverable tax amounts on the Tax Analysis report.
- Do not apply for cash receipts, and you cannot enter them as a default tax code in a project's billing terms.
For more information, see the Non-Recoverable Tax Examples topic.
| Field | Description | ||||||||||
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| Non Recoverable Tax Rate | If this tax code has a non-recoverable tax portion, enter the non-recoverable rate for this tax. Enter a whole number in this field. For example, if the rate is 8%, enter 8 (not .08). The percentage that you enter is applied to the net amount of a transaction expense when the tax code is applied.
Example: A tax code has a rate of 13% and a non-recoverable rate of 8%. The tax calculation would be 13% of the net amount of the transaction expense. The non-recoverable tax calculation would be 8% of the net amount of the same transaction expense. For more detailed examples, see the "Non-Recoverable Tax Examples" topic. If this tax code is for a reverse charge tax and you selected the Reverse Charge Tax check box, the Rate field is not enabled. It prefills with the rate that you entered in the Rate field at the top of this tab. |
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| Reverse Charge Tax |
Select this check box if the tax is a reverse charge tax. A reverse charge tax is commonly used in the European Union Value Added Tax system. The buyer of a good or service is responsible for recording a VAT transaction for a reverse charge tax. Reverse charge taxes can be used in Vantagepoint for the following:
Before you can select the Reverse Charge Tax check box, you must select a check box (Available for Purchasing, Transaction Entry, and/or Employee Expenses) in the Inputs section to determine the areas of Vantagepoint in which you can use the reverse charge tax. See the sections below for more information about each of these areas. When you select the
Reverse Charge Tax check box:
Selecting the Reverse Charge Tax check box and the Transaction Entry check box in the Inputs section When you select the Reverse Charge Tax check box and the Transaction Entry check box in the Inputs section on this tab, the reverse charge tax code is available to apply to the following:
When you select a reverse tax code for an AP voucher, AP disbursement line item, or a purchase order line item to create an AP voucher, the following general ledger information applies when the transactions are posted:
When you select the Reverse Charge Tax check box and the Available for Purchasing check box in the Inputs section of this tab, you can associate a reverse-charge tax with a ship-to address that you enter for a purchase order. You enter a reverse charge tax for a ship-to address on the Ship tab in , in the desktop application. Then, when you create an accounts payable voucher from a purchase order in , in the desktop application, the reverse charge tax is automatically applied to the voucher, based on purchase order's ship-to address. Selecting the Reverse Charge Tax check box and the Employee Expenses check box in the Inputs section When you select the Reverse Charge Tax check box and the Employee Expenses check box in the Inputs section of this tab, the reverse charge tax code is available to apply to employee expense line items that you enter in and . When you select a reverse charge tax code for an expense item in the items grid in either application, you see the following in the line item grid:
When you select a reverse tax code for an employee expense line item, the following general ledger information applies when the transactions are posted:
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| Debit Posting Fields | Enter the debit information in these fields for either the non-recoverable portion of the tax or for the reverse charge tax if this is a reverse charge tax. If this is a reverse charge tax and you do not enter a debit account in this field, the account that is entered in the transaction will be used for the reverse charge tax.
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| Credit Posting Fields | Enter the credit information in these fields for either the non-recoverable portion of the tax or for the reverse charge tax if this is a reverse charge tax.
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in this field to open the Account lookup, and select the account number for the debit.