Skip to main content

Notifications

Microsoft Dynamics AX forum
Suggested answer

Sales Tax Split recoverable and non recoverable

Posted on by Microsoft Employee

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.

Categories:
  • Suggested answer
    FK-20051835-0 Profile Picture
    FK-20051835-0 5 on at
    Sales Tax Split recoverable and non recoverable
    Thank you all,
     
    I find a solution for my questioner, you can use the to function of Use tax expense field, select the main account for posting deductible Use taxes that are not claimed or reported to the tax authority by vendors. The Use tax option must be selected for the Sales tax code in the Sales tax group that is used in the transaction.
     
    This field won't be available if the Apply sales tax taxation rules option is selected on the General ledger parameters page.
     
    The deductible percentage in the tax value in tax code, should be zero (to direct all tax value to specific account), or place a percentage to make some of it to Use tax expense account, and the remaining to regular expense or inventory item related account.
     
    Thank you all.
  • FK-20051835-0 Profile Picture
    FK-20051835-0 5 on at
    Sales Tax Split recoverable and non recoverable
    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
     
  • ZvikaR Profile Picture
    ZvikaR 61 on at
    RE: Sales Tax Split recoverable and non recoverable

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

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

  • KSchmid Profile Picture
    KSchmid 10 on at
    RE: Sales Tax Split recoverable and non recoverable

    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.

  • ZvikaR Profile Picture
    ZvikaR 61 on at
    RE: Sales Tax Split recoverable and non recoverable

    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 %]

  • KSchmid Profile Picture
    KSchmid 10 on at
    RE: Sales Tax Split recoverable and non recoverable

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

  • ZvikaR Profile Picture
    ZvikaR 61 on at
    RE: Sales Tax Split recoverable and non recoverable

    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

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Sales Tax Split recoverable and non recoverable

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

  • Suggested answer
    ZvikaR Profile Picture
    ZvikaR 61 on at
    RE: Sales Tax Split recoverable and non recoverable

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

  • Suggested answer
    ZvikaR Profile Picture
    ZvikaR 61 on at
    RE: Sales Tax Split recoverable and non recoverable

    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.

Helpful resources

Quick Links

Community Spotlight of the Month

Kudos to Mohamed Amine Mahmoudi!

Blog subscriptions now enabled!

Follow your favorite blogs

TechTalk: How Dataverse and Microsoft Fabric powers ...

Explore the latest advancements in data export and integration within ...

Leaderboard

#1
André Arnaud de Calavon Profile Picture

André Arnaud de Cal... 283,907 Super User

#2
Martin Dráb Profile Picture

Martin Dráb 225,189 Super User

#3
nmaenpaa Profile Picture

nmaenpaa 101,146

Featured topics

Product updates

Dynamics 365 release plans