Inclusive VAT Support in Purchase Orders

The Purchase Orders module supports value added taxes (VATs) on purchased items if the VAT Reporting feature is enabled on the Enable/Disable Features (CS100000) form.

In most European countries, where VATs are often used, prices for consumers are tax-inclusive—that is, specified with the tax amount included. In MYOB Acumatica, you can configure the VAT-like taxes or sales taxes as calculated separately on item prices or as extracted from prices. The base and sale prices, too, can be specified as including or excluding the appropriate tax amount.

Inclusive and non-inclusive taxes are configured on the Taxes (TX205000) form. For inclusive taxes, the Extract from Item Amount option is selected.

On the Purchase Orders (PO301000) form, the document details include applicable taxes shown for informational purposes on the Tax Details tab; the list of applicable taxes includes the taxes present in both the vendor tax zone and the ordered item's tax category. On the Purchase Receipts (PO302000) form, tax amounts are calculated because although value-added taxes for inventory items are paid to vendors, they are claimable from the tax agency.

Example of Inclusive Tax Processing

Consider an example in which a company purchases 100 motherboards at $22 each with a 10% VAT included. The total amount is $2200, and the VAT amount calculated for the document is $200.

The following transactions will be generated for the Inventory receipt.

The following transactions will be generated for the Accounts Payable bill.

If any difference arises, because of rounding, between the original order amount and the sum of the tax amount and the amount to be recorded to the accrual account, it will be added to the Purchase Price Variance account.