Sales Tax Split recoverable and non recoverable

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Dear All,

I am in a situation where I am having an Invoice of 1000 with Tax of 5% which is 50. now when I need to claim this tax it will be only 30 but 20 can't be claimed as per law.

2nd scenario is where I have to pay but can't be claim it will be as expense.

so how can I handle such situation in dynamics ax 2012 r2 cu7.

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André Arnaud de Cal... 301,119 Super User 2025 Season 2 on at

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Hi Sajjad,

It is a hard question to answer for me as I'm not aware of the regulations in your country. There are some methods when I look at Taxation I'm aware of and familiar with.

There is a field called 'Non deductible %' on the Tax values which can be setup per Tax code. From your initial question, I don't know if the part which can't be claimed is a fixed amount or also based on a percentage.

Another option would be splitting the tax per document (line). It is possible to split the Tax using corrections or specify more than one line and specify per line with code combinations if the Tax is deductible or not.

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ZvikaR 168 on at

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This is a common scenario where tax is only partially recoverable.

I have seen it with petrol expenses in France or with meals in Canada.

I think your 2 scenarios are actually 1 scenario. You record the full tax, part of it is recoverable and the portion that is not recoverable becomes part of the expense on the purchase.

As Andre said, the functionality to use (in D365, in AX2012 it is named a bit differently) is the value on [Values] form, on the "non-deductible %"

In your case, the tax % is 5, and the non-deductible %" is 40%.

that way on your AP invoice of 1000, when this tax code is applied:

- 50 is calculated and added to the invoice total which is 1050.

- 60% recoverable, 60% * 50 = 30, will post into "tax receivable" account

- 40% non-recoverable, 40% * 50 = 20, will post to the same expense account used for recording the AP invoice.

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ZvikaR 168 on at

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did that answer your question? if it did, please mark the thread as closed for the benefit of readers and writers.

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Community Member on at

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yes as an percentage ok. but what about if its a fix value then what to do?

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ZvikaR 168 on at

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If these are one-off amounts, not based on calculation, you can manually override the tax amount on the transaction itself.

typically it is easier to do by entering the AP journal as a gross journal, and reducing the tax amount by the non-recoverable amount - it will make the remainder of the amount be counted as cost

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KSchmid 10 on at

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Can you identify the functionality is AX2012 to identify the non deductible %?

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ZvikaR 168 on at

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Menu path is probably a bit different, but the form name should be the same:

Tax > Indirect taxes > Sales tax > Sales tax codes

Press [Values] button

Populate value in the [Non Deductible %]

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KSchmid 10 on at

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I do not see the Non Deductible field. I only have From Date, To Date, Minimum limit, Upper limit, value and Pct. exempt from sales tax.

Is there a parameter setting somewhere that enables the non deductible functionality?

Note: I am using AX 2012 R3.

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ZvikaR 168 on at

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It's the "Pct. exempt from sales tax"

not a great name, I guess that's why they fixed it in D365

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FK-20051835-0 5 on at

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Hi,

What zavik has answered is 100% correct, although is there is any way to make this non-recoverable value directed to specific account, instead of increasing inventory value, with this non-recoverable value, or increasing the regular related expense account?

I hope any one can answer this.

With best regards

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