Value-Added Taxes: To Create a Pending VAT

By performing this implementation activity, you will learn how to configure a pending VAT recognized on payments.

Story

Suppose that SweetLife Fruits & Jams provides services to customers and the VAT amounts of invoice payments need to be recognized on payment dates. Acting as an implementation consultant, you need to update the settings of the tax agency and create a pending VAT of the Output type.

Configuration Overview

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

  • On the Enable/Disable Features (CS100000) form, the VAT Reporting feature has been enabled.
  • On the Chart of Accounts (GL202500) form, the 24200 (Pending Tax Payable) and 17500 (Pending Tax Claimable) accounts have been created.

Process Overview

In this activity, on the Vendors (AP303000) form, you will update the settings of the tax agency to make it possible to recognize pending VAT on payments. On the Taxes (TX205000) form, you will create a pending VAT.

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. On the Company and Branch Selection menu, on the top pane of the MYOB Acumatica screen, select the SweetLife Head Office and Wholesale Center branch.
  3. As a prerequisite activity, in the company to which you are signed in, be sure you have configured a tax agency and a tax report as described in Tax Report Configuration: To Create a Tax Report for VAT Variations.
  4. As a prerequisite activity, be sure that you have created the CANADA tax zone on the Tax Zones (TX206000) form as described in Tax Zones and Categories: To Create a Tax Category and Tax Zone for VAT.
  5. As a prerequisite activity, be sure that you have created the PENDING tax category on the Tax Categories (TX205500) form as described in Tax Zones and Categories: To Create a Tax Category and Tax Zone for VAT.
  6. As a prerequisite activity, be sure that you have configured a tax report on the Reporting Settings (TX205100) form and reporting groups for the tax report on the Reporting Groups (TX205200) form. For details, see Tax Report Configuration: To Create a Tax Report for VAT Variations.

Step 1: Updating the Tax Agency Settings

To update the tax agency settings, do the following:

  1. Open the Vendors (AP303000) form.
  2. In the Vendor ID box, select VATVAR.
  3. On the Tax Agency tab, specify the following settings:
    • VAT Recognition Method: On Payments

      This setting means that the tax amounts will be recognized based on the payments applied to documents.

    • Output Tax Entry Ref. Nbr.: Payment Ref. Nbr.

      This setting means that the reference numbers of the payments will be used as the reference numbers of the documents subject to pending output VAT included in a tax report.

  4. On the form toolbar, click Save.

Step 2: Creating a Pending VAT

To create a pending VAT, do the following:

  1. On the Taxes (TX205000) form, create a new record.
  2. On the Tax Settings tab, specify the following settings:
    • Tax ID: PVAT
    • Description: Pending VAT
    • Tax Type: VAT
    • Pending VAT: Selected
    • Include in VAT Taxable Total: Selected
    • Calculation Rule: Exclusive Line-Level
    • Cash Discount: Does Not Affect Taxable Amount
    • Tax Agency: VATVAR
  3. On the Tax Schedule tab, click Add Row on the table toolbar, and specify the following settings:
    • Start Date: 1/1/1900 (inserted by default)
    • Tax Rate: 7
    • Reporting Group: Pending (Output)
  4. Click Add Row again and specify the following settings for a new row:
    • Start Date: 1/1/1900 (inserted by default)
    • Tax Rate: 7
    • Reporting Group: Pending (Input)
  5. On the Categories tab, click Add Row on the table toolbar, and select PENDING in the Tax Category column.
  6. On the Zones tab, click Add Row on the table toolbar, and select CANADA in the Tax Zone ID column.
  7. On the GL Accounts tab, specify the following settings:
    • Pending Tax Payable Account: 24200 (Pending Tax Payable)

      This account will be credited in the amount of the pending output VAT that is imposed on taxable sales.

    • Pending Tax Claimable Account: 17500 (Pending Tax Claimable)

      This account will be debited in the amount of the pending input VAT that is imposed on taxable purchases.

  8. On the form toolbar, click Save.