Tax Report Configuration: To Create a Tax Report for VAT

By performing this implementation activity, you will learn how to configure the content of a tax report for general VAT, and to specify the rules of accumulating the data in the report lines.

Story

Suppose that the tax agency, to which the SweetLife Fruits & Jams company is going to report VAT, requires that the tax report includes the following lines:

  1. Taxable Sales: Accumulates the total amount of taxable sales processed in the tax period
  2. Exempt Sales: Accumulates the total amount of VAT-exempt sales processed in the tax period
  3. Total Sales: Accumulates the total sales amount (that is, Taxable Sales + Exempt Sales) in the tax period, excluding the tax amounts
  4. Taxable Purchases: Accumulates the total amount of taxable purchases processed in the tax period
  5. Exempt Purchases: Accumulates the total amount of VAT-exempt purchases processed in the tax period
  6. Total Purchases: Accumulates the total purchases amount of documents (that is, Taxable Purchases + Exempt Purchases) processed in the tax period, excluding the tax amounts
  7. Total Output Tax: Accumulates the total tax amount collected from customers in the tax period
  8. Total Input Tax: Accumulates the total tax amount paid to vendors in the tax period
  9. Tax Amount Payable: Accumulates the total tax amount to be paid to the tax agency in the tax period (that is, output tax minus input tax)

Acting as an implementation consultant, you need to configure the tax report to meet the requirements of the tax agency.

Configuration Overview

In the U100 dataset, the following configuration tasks have been performed to prepare the system for this activity to be performed:

Process Overview

In this activity, you will prepare the tax report by doing the following:

  1. You will create a tax report for the needed tax agency and add lines to it on the Reporting Settings (TX205100) form.
  2. You will add reporting groups on the Reporting Groups tab of the Reporting Settings form.
  3. On the Reporting Groups (TX205200) form, you will specify the report lines that should be updated by the taxes associated with each reporting group.
  4. On the Reporting Settings form, you will review the calculation rule for the report lines added automatically by the system.

System Preparation

To prepare the system, do the following:

  1. Launch the MYOB Acumatica website, and sign in to a company with the U100 dataset preloaded. You should sign in as an implementation consultant by using the gibbs username and the 123 password.
  2. As a prerequisite activity, in the company to which you are signed in, be sure you have configured a tax agency as described in Tax Agency: To Set Up a Tax Agency for VAT.

Step 1: Creating a Tax Report and Adding Report Lines

To create a tax report and add report lines to it, do the following:

  1. Open the Reporting Settings (TX205100) form.
  2. In the Tax Agency ID box, select VATTAX.
  3. In the Valid From box, select 1/1/2024.
  4. On the Report Lines tab, for each line of the tax report to be added, click Add Row on the table toolbar and specify the appropriate settings (listed below) in the row:
    Report Line Order (added by default) Description Update With Update Rule Net Tax Hide Report Line
    1 Taxable Sales Taxable Amount +Output-Input Cleared Cleared
    2 Exempt Sales Taxable Amount +Output-Input Cleared Cleared
    3 Total Sales Taxable Amount +Output-Input Cleared Cleared
    4 Taxable Purchases Taxable Amount +Input-Output Cleared Cleared
    5 Exempt Purchases Taxable Amount +Input-Output Cleared Cleared
    6 Total Purchases Taxable Amount +Input-Output Cleared Cleared
    7 Total Output Tax Tax Amount +Output-Input Cleared Cleared
    8 Total Input Tax Tax Amount +Input-Output Cleared Cleared
    9 Tax Amount Payable Tax Amount +Output-Input Selected Cleared

    Because you selected the Net Tax check box for the Tax Amount Payable report line, the amount accumulated in this line will be used as the document amount in the tax bill generated by the system for the tax agency.

    Tip:

    In the report that you have configured, tax and taxable amounts for a particular tax will be accumulated in the same report lines, even if the customers and vendors belong to different tax zones. To break down the amounts by tax zones in the tax report, you can create separate report lines for each tax zone and select the zone in the Tax Zone ID column, so that each line will include amounts for the selected tax zone only.

    Alternatively, you can select the Detail By Tax Zones check box for the needed report line, to make the system split this line into multiple lines, one for each tax zone that exists in the system. If you create a new tax zone after the tax report has already been configured, click the Reload Tax Zones button to make the system add report lines for the newly created tax zone.

  5. On the form toolbar, click Save.

Step 2: Adding Reporting Groups to the Report

To add reporting groups to the newly created tax report, while you are still viewing the report on the Reporting Settings (TX205100) form, do the following:

  1. On the Reporting Groups tab, for each line to be added, click Add Row on the table toolbar and specify the appropriate settings (listed below) in the row:
    • Name: Taxable Sales, Group Type: Output

      You will assign to this group the VAT with a 7% rate that will apply to taxable sales.

    • Name: Taxable Purchases, Group Type: Input

      You will assign to this group the VAT with a 7% rate that will apply to taxable purchases.

    • Name: Exempt Sales, Group Type: Output

      You will assign to this group the zero-rate VATEXEMPT tax, which will apply to exempt sales.

    • Name: Exempt Purchases, Group Type: Input

      You will assign to this group the zero-rate VATEXEMPT tax, which will apply to exempt purchases.

    Note: You use the Output type for the taxes that are collected from the customers and should be paid to a tax agency. You use the Input type for the taxes that are paid to vendors and thus should be claimed from a tax agency.
  2. On the form toolbar, click Save.

Step 3: Specifying the Report Lines to be Updated

To specify which report lines will be updated with taxes, do the following:

  1. While you are still viewing the report on the Reporting Settings (TX205100) form, in the table on the Reporting Groups tab, click the row for the Taxable Sales group, and on the table toolbar, click Group Details.
  2. On the Reporting Groups (TX205200) form, which opens, for each line to be added, click Add Row on the table toolbar, and specify the appropriate settings (listed below):
    • Report Line: 1 - Taxable Sales
    • Report Line: 3 - Total Sales
    • Report Line: 7 - Total Output Tax
    • Report Line: 9 - Tax Amount Payable
  3. On the form toolbar, click Save to save your changes.

    The taxes that you will assign to the Taxable Sales reporting group will be included in report lines 1, 3, 7, and 9. Thus, the taxable amount of invoices subject to output VAT will update the values in the 1 - Taxable Sales and 3 - Total Sales lines, while the tax amount will update the 7 - Total Output Tax and 9 - Tax Amount Payable lines.

  4. In the Reporting Group box of the Summary area, select Taxable Purchases.
  5. For each line to be added, on the table toolbar, click Add Row, and specify the appropriate settings in the added row:
    • Report Line: 4 - Taxable Purchases
    • Report Line: 6 - Total Purchases
    • Report Line: 8 - Total Input Tax
    • Report Line: 9 - Tax Amount Payable
  6. On the form toolbar, click Save to save your changes. The taxes that you will assign to the Taxable Purchases reporting group will be included in report lines 4, 6, 8, and 9.
  7. In the Reporting Group box, select Exempt Sales.
  8. For each line to be added, on the table toolbar, click Add Row, and specify the appropriate settings in the added row:
    • Report Line: 2 - Exempt Sales
    • Report Line: 3 - Total Sales
  9. On the form toolbar, click Save to save your changes. The taxes that you will assign to the Exempt Sales reporting group will be included in report lines 2 and 3.
  10. In the Reporting Group box, select Exempt Purchases.
  11. For each line to be added, on the table toolbar, click Add Row, and specify the appropriate settings in the added row:
    • Report Line: 5 - Exempt Purchases
    • Report Line: 6 - Total Purchases
  12. On the form toolbar, click Save to save your changes. The taxes that you will assign to the Exempt Purchases reporting group will be included in report lines 5 and 6.

Step 4: Reviewing the Calculation Rule for Report Lines

To review the calculation rules for report lines, do the following:

  1. Open the Reporting Settings (TX205100) form.
  2. In the Tax Agency ID box, select VATTAX.
  3. On the Report Lines tab, review the Calc. Rule column.

    You have configured the reporting groups so that the 1 - Taxable Sales line is updated by the taxes included in the Taxable Sales group, the 2 - Exempt Sales line is updated by the taxes included in the Exempt Sales group, and the 3 - Total Sales line is updated by the taxes that are included in both the Taxable Sales and Exempt Sales groups.

    As a result, the aggregate line 3 amount is calculated as a sum of the amounts in lines 1 and 2. The system has automatically updated the calculation rule based on the settings that you have specified. Similarly, report line 6 is the aggregate line that is updated by the taxable amounts included in lines 4 and 5, and report line 9 is the aggregate line updated by the tax amounts included in lines 7 and 8.