Taxes in Expense Receipts

In MYOB Acumatica, you can configure the system to apply taxes to expense receipts and expense claims that employees enter into the system on the Expense Receipt (EP301020) and Expense Claim (EP301000) forms, respectively. You can review the tax and taxable amounts that the system has calculated in the expense receipts, and adjust them, if needed.

Also, if the Net/Gross Entry Mode feature is enabled on the Enable/Disable Features (CS100000) form, you can specify whether the expense receipt amounts are tax-inclusive or tax-exclusive.

Taxes That Are Applicable to Expense Receipts

When a user selects an expense item in the expense receipt created on the Expense Receipt (EP301020) form, the system fills in the tax settings of this item (tax category and tax calculation mode). The default tax zone in the expense receipt is copied from the settings of the Claimed By employee. If needed, you can change any of these default settings.

The system calculates the taxes to be applied to the expense receipt amount by using the settings of each tax that corresponds to both the tax category and the tax zone specified in the expense receipt. The total tax amount is shown in the Tax Total box in the Summary area.

The table on the Taxes tab of the Expense Receipt form displays the details of all taxes that are applicable to the expense receipt.

Tax-Exclusive and Tax-Inclusive Amounts in Expense Receipts

Before entering expense receipt amounts, the user must consider the type of amounts specified in the original expense documents. An expense receipt can contain amounts that are either tax-inclusive (gross) or tax-exclusive (net). In MYOB Acumatica, you can specify the tax calculation mode in the settings for a particular receipt on the Expense Receipt (EP301020) form. The selected mode defines how the system will compute the tax and taxable amounts for the document.

Note: The ability to specify whether the expense receipt amounts are tax-inclusive or tax-exclusive is available only if the Net/Gross Entry Mode feature is enabled on the Enable/Disable Features (CS100000) form.

When you enter an expense receipt on the Expense Receipt (EP301020) form, the default tax calculation mode specified in the Tax Calculation Mode box is copied from the settings of the selected expense item. If needed, you can override this setting in the expense receipt. The following tax calculation modes are available:

Gross: The tax amount is included in the unit cost specified in the expense receipt. The system calculates the taxable amount for an expense receipt as follows: Amount – Employee Part – Tax Total.
Net: The unit cost specified in the expense receipt does not include the tax amount. The system calculates the taxable amount for an expense receipt as follows: Amount – Employee Part.
Tax Settings: Standard tax settings should be applied to the expense receipt. For details, see Tax Calculation Methods: General Information.

Note: In expense claims, the system specifies Tax Settings as the default tax calculation mode in the Tax Calculation Mode box on the Financial tab on the Expense Claim (EP301000) form. The tax calculation mode specified for the expense claim is used by default in expense claim lines entered directly on the Details tab of the form.

Expense Receipts with Mixed Tax Settings

By default, a user can add to an expense claim only expense receipts with the same tax zone and tax calculation modes. When the expense claim is released, the system generates an AP document for all expense receipts that have been added to the expense claim.

If you need to create an expense claim for expense receipts with different tax settings, you have to select the Allow Mixed Tax Setting in Claims check box on the Time and Expenses Preferences (EP101000) form. When an expense claim that includes expense receipts with different tax settings is released, the system generates multiple AP documents, each of which contains expense receipts with the same tax zone and tax calculation mode.

Discrepancies Between Reported and Calculated Tax Amounts

Due to different rounding settings in different systems, some discrepancies can appear between the tax amount computed in MYOB Acumatica and the tax amount specified in the original expense documents. The user can manually correct the tax amount in the Tax Amount column of the Taxes tab in the expense receipt being entered so that the specified tax amount matches the tax amount in the original document. Also, the user can correct the tax amount in the Document Taxes dialog box on the Expense Claim (EP301000) form (which the user invokes by clicking the link in the Tax Amount column on the Details tab). If the amounts of inclusive taxes differ from the calculated amounts, the discrepancy will be shown in the Tax Discrepancy box on the Taxes tab.

To be able to process an expense receipt with a discrepancy amount, you need to specify the maximum amount of the difference that can appear because rounding in the Rounding Limit box on the General Ledger Preferences (GL101000) form. If the discrepancy amount does not exceed the limit, the system will post this discrepancy amount to the general ledger accounts specified in the Rounding Gain Account/Subaccount box or the Rounding Loss Account/Subaccount box on the General Ledger Preferences form. If the discrepancy exceeds the rounding limit, the expense receipt cannot be submitted for further processing. For more information, see Purchases with Sales Taxes: Tax Amount Validation.