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Sales Tax on Gift card sales

Posted on by

Here I am presenting setup and steps on how Sales tax is calculated for Gift card sales in standard Contoso environment

Below you can find a document attached with screenshots included.


1. Open D365 10.0+ supported version, USRT company.
2. Set up Gift card in Commerce parameters:
Search for Commerce parameters/Tab Posting/section Gift card:

- Gift card product= 9999
- Tax on gift cards= YES
- Gift card company= USRT
- Journal= GenJrn

3. Set up Item sales tax group on Gift card item:
Search for Released products by category/find Gift card item 9999/Edit/Tab Sell/section Taxation:

- Item sales tax group= RP

4. Set up Price include sales tax on a store:
Search for All stores/select HOUSTON/Edit/section Sales tax:

- Prices include sales tax= should be marked to YES

5. Distribute changes to POS:
Search for Distribution schedule/select 9999 All jobs/Run now.

Search for Download sessions/Refresh/Check if the Status is Applied.

6. Issue gift card in POS:
Open POS. Log in.
Current transaction/Enter customer 1001.
Actions/Gift cards/Issue gift card:
- Card number= 998877
- Amount= 500,00

- Subtotal= 500,00
- Tax= 0,00
/Pay Cash.
/Close shift.

7. Run P-job:
Search for Distribution Schedule/select the P-0001 job/Run now/OK.
8. Validate store transactions:
Search for Validate store transactions/select Houston store/OK.
9. Create Retail Statement:
Search for Statements/New/Transaction posting (Trickle-feed feature enabled)/select HOUSTON Store number/OK/Statement calculated:

Transactions included:

/Post statement.

10. Check posted vouchers:
Search for Audit trial/sort by date/3 vouchers are posted:

- Sales invoice voucher:

- Payment posted:

- Sales tax on issued gift card voucher:

Posted two ledger transactions with Sales tax 6,25% as per setup in Gift card item:
- One with Sales tax direction= Use tax Debit
- Other with Sales tax direction= Sales tax payable Credit

11. Sell an item in POS and pay with a Gift card:
Open POS. Log in.
Current transaction/Enter customer 1001.
Enter item 0113.

- Subtotal= 94,11
- Tax= 5,88
- Amount due= 99,99

Pay gift card/Add Gift card number 998877/Tender payment.
/Close Shift.

12. Run P-job:
Search for Distribution Schedule/select the P-0001 job/Run now/OK.
13. Validate store transactions:
Search for Validate store transactions/select Houston store/OK.
14. Create Retail Statement:
Search for Statements/New/Transaction posting (Trickle-feed feature enabled)/select HOUSTON Store number/OK/Statement calculated:

Transactions included:

/Post statement.

15. Check posted vouchers:
Search for Audit trial/sort by date/3 vouchers are posted:

- Sales invoice voucher:

- Payment posted:

- Sales tax posted for payment with Gift card (reducing sales tax from initially posted sales tax for issued gift card):

Posted two ledger transactions with Sales tax 6,25% as per setup in Gift card item:
- One with Sales tax direction= Use tax Credit
- Other with Sales tax direction= Sales tax payable Debit

*This post is locked for comments

  • Ramune Profile Picture
    Ramune on at
    RE: Sales Tax on Gift card sales

    In addition something about the feature - we support sales tax posted only on the HQ side at the time when financial voucher posted.

    When you need to get sales tax calculated and displayed in POS at the time when you issue Gift card - this is not supported feature

    Some details/explanation below:

    In Retail/Commerce we support ‘multi-purpose vouchers’ and this does not require (there is no law requirement for ‘multi-purpose vouchers’) to have sales tax calculated at POS side.

    Our gift cards apply only to ‘multi-purpose vouchers’ which is not a case for the law requirement (as an example there is a link (just any took from search machine) - https://erply.com/all-that-you-need-to-know-about-taxation-of-gift-cards-in-eu/ ). This law only applies to 'single-purpose vouchers'.

    By definition, a 'single-purpose voucher' is tied to a specific item or service. We do not support such a concept at all in our product. A gift card (which we use in Retail) is not tied to a particular item or service – it is basically a preloaded card that can be used to pay for anything – and it can be used multiple times.

    We have no concept of a 'single-purpose voucher' in our product so there is no way we can support this requirement. We could never support this requirement with current gift card logic as gift cards are not “single use” or tied to only being able to be used to pay for a specific product or service.

    Taken from the link provided above:
    The amendment only concerns single-purpose vouchers. A 'single-purpose voucher' is a voucher where the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, are known at the time the voucher is issued. Such vouchers are issued by the taxable person, who can calculate the VAT upon transfer. Single-purpose vouchers are issued in relation to the provision of a single specific product or service. The owner of this type of voucher can only use it to buy a certain product or service (e.g. the gift card of a restaurant, tanning salon or massage parlour).

    This concept applies most often to service industries – like a salon. Example:

    ..You want to pay for a friend to get a manicure. You walk into the salon and ask to purchase a gift certificate/card for a manicure. This is a single-purpose voucher. In this context, selling the single-purpose voucher means that your friend can only redeem that voucher for a manicure – if they ask for a haircut instead – that is not allowed. This is why the taxes are prepaid – because the retailer has ‘sold’ the manicure up front to you, to be redeemed later by your friend. They collect the taxes up front knowing that there won’t be any possibility of taxes being different upon redemption.

    This is not how our gift cards work – they are not tied or linked to any sort of product or service up front.

    If something different is required to be used in your stores, we suggest you to use some workarounds, create customization or some Add-on.

  • Ramune Profile Picture
    Ramune on at
    RE: Sales Tax on Gift card sales

    1727.Sales-Tax-on-Gift-card-sales_5F00_D365.docx

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