VAT on prepayment invoices

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Hi all,

I am trying to investigate the "Prepayment invoice" functionality in AP (from Purchase Orders) for a particular scenario involving witholding taxes on payment.

In a few words: I need to calculate the witholding taxes on the payment journal for the prepayment itself.

The problem is that I cannot avoid VAT to be calculated on Prepayment invoice so TaxTrans table to be written at that moment. I need VAT to be calculated and TaxTrans to be written only at the moment of the actual invoice and not for the prepayment.

It is the first time I use this functionality so I am not familiar with it: is there any way to manage this issue?

Thank you in advance

Ugo

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Community Member on at

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Just to be a bit more clear about the issue:

Invoice total before VAT: 2000

Prepayment should calculate VAT: 400 (and post it on a "temporary VAT account" that is the one it already uses).

So total prepayment: 2400

But no TaxTrans should be used since we should not take VAT on prepayments into consideration for Sales Tax Payments.

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MichaelWC 136 on at

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Not sure exactly but you may need to setup a Tax Group (Zero rated) for Self Billing Customers and add that customer to that tax group.

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Hi

I have a similar problem, the difference is that I require calculating the VAT when the prepayment with a purchase order is generated and not when paid.

Someone knows the procedure?

Thanks

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Ludwig Reinhard Microsoft Employee on at

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Hello Ugo,

I am not an expert in Italian VAT but believe that things are similar in Europe. What we are usually doing in Germany & Austria is setting up a temporary non-dectible VAT tax code that transfers the tax posted to the ordinary VAT tax code once you make the payment of your prepayment invoice. This can be realized by linking the temporary VAT tax code to the ordinary VAT tax code via the payment sales tax code field.

If you have access to a Microsoft Contoso demo environment you can find such as setup in the DEMF company for the VAT code that applies to the sales of items. Yet, this setup can easily be replicated for purchases.

Unfortunately, I do not know the relationship to withholing taxes you mention. This must be something country specific.

I believe what might help you is the following TechNet site: technet.microsoft.com/.../hh242104.aspx

Additional country-specific VAT setup Information can be found on customer source. If you search for "AX2009 Finance I" you will be able to find lots of very detailed country-specific setup information incl. examples, etc. Even though these documents are for AX2009, many things still apply to AX2012.

Hope this information helps at least a bit to get your issue fixed.

All the best,

Ludwig

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