Canadian GST/HST and Inter-company invoices

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Posted on by Chad Dragon

Hello all,

What I'm trying to do concerns Inter-company invoices and GST/HST. We have a "US" company and a "CAN" company in our database. When the US company sells some inventory to the CAN company, the HST calculates just fine on the US side and goes to our liability account "Canadian sales tax payable" which I track and remit to Revenue Canada each month. The CAN side is the problem. In the CAN company, I have the US company setup correctly as a vendor with the right tax code, but I can't get the software to post the GST/HST portion of the invoice to our account we have that is for "Input Tax Credits". (Input Tax Credits are on purchases, to be taken against sales tax payable) The way I understand the GST/HST rules is that we're supposed to remit the tax on Inter-company sales, but we can claim the Input Tax Credit against that tax to wash out the transaction.

Any help would be most appreciated!

Regards,

Chad Dragon

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Problem solved! (I think) I had to go into General Ledger-Parameters, and uncheck the "Apply U.S. sales tax and use tax rules". When this box is left checked, AX only allows sales and use tax "payable" accounts to be specified for tax charged on sales in General Ledger-Ledger Posting Groups. However, when unchecked, the Ledger Posting Groups open up to allow a sales tax "receivable" account as well, which would be all tax paid to vendors on purchases. (ie. Input Tax Credits on Canadian GST/HST returns) I tested things with a dummy PO and then invoice in our training environment, and it looks like it works! (cost of inventory item goes to correct inventory account, the GST/HST tax portion goes to our sales tax receivable account, etc...)

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