Multiple Tax Codes In SAP Business One Sales AR Invoice

[former_member349215]

Dear SBO Experts,

Below is a requirement by one of our Clients:

All sales in our restaurant are subjected to a 2% catering levy of the net amount (before VAT). Please also  note that all items are tax liable (subjected to 16% Value Added Tax).

Consider this example:

A sales invoice of 1,000 (Total Before Discount)

1. The amount will attract a VAT of 160 (16% *1000) and a Catering Levy of 20 (2% *1000)

2. The entries are:

Debit - Accounts receivable/ Customer 1180 (Document Total)

Credit - Revenue 1,000

Credit - VAT 160

Credit - Catering Levy 20.

I have tried setting up withholding tax and linking it to the customers but the Document Total is coming to 1140 instead of 1180.

I need your assistance configuring this requirement on SBO and making sure GL accounts are posted as specified above. Thanks

Kind Regards,

Pascale

[former_member349215 · Accepted solution]

So after numerous tests we finally got a solution to this requirement.

1. We created a Catering Levy account under the Liability drawer of the Chart of Accounts.

2. We defined a tax code called CL (tax code) - Catering Levy with 2% tax rate also linked to the catering levy account in the liability drawer.

3. We also created a catering item group.

4. Then we created an item called Catering Levy (LEVY001), linked it to the catering levy group and defined is as a sales item only.

5.In the sales invoice, we added the restaurant sales items as they are normally added.

6. We then added '1' catering levy item as the last line item. The price of the catering levy was the 'Total Before Discount value'. The item was then linked to CL tax code.

Note: We also enabled 'Tax Only' for the catering levy item. The tax only column was added via form settings.

By Enabling Tax Only, the tax for the catering levy item was calculated but not its total. i.e. 1000*2/100=20

Kind Regards,

Pascale

[Johan_H]

Hi Pascale,

How about this:

1. (Optional) In Tax Groups, create a tax of zero percent
2. Create an item called "Catering job" or "Food", or what ever, that you can assign the 1000 to.
3. Assign the 16% VAT tax group to this item.
4. Create an item called "Catering Levy"
5. Make the item tax free or assign a zero percent tax group to this item (see step 1).
6. Create an invoice of type item
7. Add the "Catering Job" item 1 pcs, price 1000
8. Add the "Catering Levy" item, 1 pcs, price 20  (1000 x 0,02)
9. DocTotal should be:
   1. 1000
   2. (1000 x 16%) = 160
   3. (20 x 0%) = 20
   4. Total 1180

You could even try to make the price for the "Catering Levy" item dynamic in the invoice using an FMS in the Price field:

If Item = "Catering Levy" Then 2% of (DocTotal-VatSum-DiscSum)

Regards,

Johan

[former_member349215]

Hi Johan,

Thank you for your input. I haven't had time to test your two ideas. I think I will do this tomorrow and then I'll get back to you.

Kind Regards,

Pascale.

[Former Member]

Hi,

Linking withholding tax to the customer and also in withholding tax-setup window set category to Payment and then try out.

Administration -- > Setup --> Financials --> Tax --> withholding tax and then change category to Payment for your Withholding tax code.

Let me know the feedback.

Thanks,

Harshal

[former_member349215]

Hi Harshal,

Thank you for your reply. I have followed your instructions and changed to payment. However during payment, the balance due for payment is 1140 instead of 1180 so I'm back to where i started with the same problem.

Kind regards,

Pascale

[Former Member]

Hi,

Then I suggest you to create Tax Code as VAT+CL that means you need to create tax formula for setting up new Tax Code as VAT+CL with vat 20% of Total Amount and CL with 2% of total amount.

This will solve your issue.

Thanks,

Harshal

[former_member349215]

Hi Harshal,

That would work but I am using UK Localization. Is there a place in SBO where I can enable this functionality?

Can you provide the path? Thanks

Kind Regards,

Pascale

[Former Member]

Hi,

Actually UK I am quiet not aware but I am sure this is possible.

First in Sales Tax Jurisdiction create 2 tax code (VAT and CL) with their appropriate rate.

Secondly go to Sales Tax Code and in first row Select Vat code and in second row select CL code.

This way you can surely come out of your issue.

Let me know if you need further information.

Thanks,

Harshal

[former_member349215]

Hi Harshal,

Sales Tax Jurisdiction is not available in UK Localization.

Kind Regards,

Pascale

[Former Member]

Hi,

Can you share the snap shot of your Tax setup windows ?

Thanks,

Harshal

[former_member349215]

As you can see, under tax there is: Tax Groups, Tax Code Determination, Withholding tax and Tax Declaration Boxes

[Former Member]

Hi,

Yes I have tried with UK localization but unfortunately it seems it is not possible to have 2 code together.

Then I think you should go with Freight setup but do not enter total amount as 20 instead you can enter total amount as 1000 so that CL amount will come to 20.

Hope this works for you.

Thanks,

Harshal

[former_member349215]

Hi Harshal,

I have tried to do that but the document total is becoming way too high. The system is summing up Total Before Discount (1000), freight/CL (1000), tax (160) = 2160

We need the total to be Total Before Discount (1000), CL (20), Tax (160) = 1180

Kind Regards,

Pascale

[Former Member]

Hi,

Ye you are correct, So in this case I think it is not possible for UK localization.

I think you need to create Manual Journal entry in such scenario.I don't find any other way out.

Just a thought,Can you divide the row into two rows and can manipulate your case with different tax code in both rows.

Thanks,

Harshal

[frank_wang6]

i think the easiest way to enable Freight charge, and then u can collect the extra 2% from that.

Frank

[former_member349215]

Hi Frank,

Thank you for your reply. You answer is a bit helpful but the freight is calculating an extra tax amount on the freight charges window....the column 'Total Tax Amount' is equal to 0.40 when Put the total amount to 20.

It seems the system is calculating 20 * 2% to get this figure.

Kind Regards,

Pascale