Sales tax taxation rules Microsoft Dynamics 365 Finance and Operations one version D365FO

Sales tax taxation rules Microsoft Dynamics 365 Finance and Operations one version D365FO

Apply sales tax taxation rules is turned ON

• Sales tax payable: account used in a customer invoice for outgoing taxes. used in sale tax to pay to sales tax authority.

• Use tax payable: account use when the sales tax is due on a payment and not on the vendor invoice.

In the Use tax payable field, select the main account for posting incoming Use taxes that are payable to tax authorities.

• The Use tax option needs to be selected in the Sales tax code in the Sales tax group to post Use tax.
• If Apply sales tax taxation rules option is selected in General ledger parameters, the offset is posted to the transaction’s expense account.

If apply US tax is checked then vendor is not required to collect tax rather the company owe these taxes and must get tracked and paid.

Apply sales tax taxation rules is turned OFF

• Sales tax receivable: account use in a vendor invoice for incoming taxes. it is the tax deductible.

In the Sales tax receivable filed, select the main account for incoming taxes that are received from the tax authority.

• Vendors collect taxes on behalf of the tax authority when you buy taxable goods and services.
• This field is not available if the Apply sales tax taxation rules option is selected in the General ledger parameters page.
• Instead, sales taxes that are paid to vendors are debited to the same account as the purchase.

• Use tax expense: account use when the sales tax is due on a payment and not on the customer invoice.

Select the ledger account for posting deductible incoming taxes that are not claimed or reported to the tax authority by vendors.

 Note If the Apply U.S. taxation rules check box is selected in the General ledger parameters form, this field is not available.

Common accounts

• Settlement account: account use for the payment of the tax.

In the Settlement account field, select the main account that the net balance of the ledger accounts specified in the Use tax payable and Sales tax receivable fields will be posted.

• The balance will be created when the Sales tax settle and post job is ran. If the Tax authority for the settlement period is associated with a vendor account, the balance is posted to the vendor account instead.

• Vendor cash discount: account number of cash discount payable.
• Customer cash discount: account number of cash discount granted.