I am confused. how exactly will separate inward and outward tax codes determine if the tax amounts are credits or debits to an account?
an outward tax code selected on a purchase invoice will still debit the tax control account.
all we are able to achieve is get the tax amounts separately.
@lubos i think you should provide the ability to control Credits and Debits for tax components. my use case was explained here.
Thatâs correct. Manager doesnât know Output: CGST + SGST 28% is not really meant to be used on purchase invoices.
But I could improve tax codes so you can optionally select transaction types for which tax code is applicable to use. So Output: CGST + SGST 28% would not really be selectable on purchase invoices which would limit number of options for user.
Is this viable?
@sharpdrivetek in the latest version (21.11.15) you can create report transformation with up to 6 columns now.
thank you. that will be a start. hope to see many more soon for sales reports.
this will only limit the clutter on transaction forms which by the way is necessary.
but what I am really looking for is a way to control amount recognized as a credit or debit to an account.
for example, the reverse charges in our country are always a credit in the liability account irrespective of whether it is selected on sales or purchase invoice.
this is because such amount cannot be offset directly when the transaction occurs. the business needs to remit this amount in cash to the authorities before it can be utilized as an input credit. since a payment is debit entry to the account, it will only inflate the control account.
you can check the RCM Payable account in localization where I have entered sample transactions for more clarity.
Have a look at your sample purchase invoice.
The tax code implies that the owe supplier âš 1,050.00 but you really owe just âš 1,000.00 because supplier is not collecting âš 50.00 in tax from you. So the tax rate for this tax code is really 0% and itâs âReverse Chargedâ at rate 5%.
Now, when tax code is reverse charged, it will âreverseâ the tax transaction within the same tax liability account but what it seems like, you actually need it to be reversed in another tax liability account.
And the reason is that government doesnât let you to offset these tax amounts with each other. You actually need to physically pay the tax liability (thus benefit of having 2 tax accounts) and only then government will give you credit (or refund) so the second account can be cleared.
yes you are correct.
for the invoice I had no other option because Manager does not allow multiple tax components when Reverse Charge checkbox is enabled for tax codes. also, there is no possibility to control to which account these amounts are posted.
correct again. but there are also possibilities where only partial credit is available even after remitting the full tax amount to authorities. that is the reason for creating seperate ITC(Y) and ITC(N) tax codes. Y implies credit eligible and N implies credit ineligible.
@lubos the first report is almost ready.
I need to create totals from columns to complete the report. any chance you could enable arithmetic operations between cells?
the report needs to display figures as positive values.
You can create a Total by putting the required Tax Reporting Categories into the cell
i am aware of the possibility but you can only get the sum of reporting categories at present.
What other sum would you want?
You can hardly want the sum of something which is not on the reort?
i never said i needed sum of something. i asked for possibility of arithmetic operations which could arrive at a total.
every country has different requirements for their localized reports.
Please see response @Lubos in other discussion on same request by me. He does not support it for reasons given in that discussion.
The RTD report in Ireland requires totals at the bottom
That would seem to answer the first part of your query
@lubos, now that Reporting Categories are working, should we switch our localizations to that? Or not just yet?
there might not have been any country-specific reports brought to his knowledge requiring the same at that time of his response.
This will have to wait till Lubos gets the code ready for reverse Charge VAT and suchlike.
As the figures are negative for inputs, the total should be correct but we will have to wait and see
@lubos i can see that you have suggested adding single rate tax codes as single line multiple rate tax codes.
but how will this work for actual multiple rate tax codes in our case? the line items on transaction forms would still show the tax code name.
@lubos as of version 21.11.25 we still have few issues to be sorted. please update on these.
the tax codesâ name still appear on line items for actual multiple rate tax codes. also, single rate tax codes created as multiple rates when selecting more than one tax code on line item.
the new reverse charged mechanism is an improvement but we still need a control over the automatic offset. in our case it would be okay for automatic offset of the outward reverse charged supplies but for inward reverse charged supplies this needs to offset manually after due payment record to the authorities. so there should be a manual control option if the user needs automatic offset.
we need to display the reverse charged amounts on the printed documents as per law.
In the latest version, tax column will show names of components if defined rather than tax code name. This is mechanism to avoid seeing Output: prefix on printed invoices.
@lubos but this mechanism will not show the total tax rate applicable to line items which is the most important thing as per law.
also, the totals section will not consolidate the individual tax components.
EDIT: Below screenshot provided as a comparison after implementing Label for tax codes.
