Concept of VAT control in A.S.I.A.

Outline

In order to do VAT management in A.S.I.A., the taxable type and the tax rate are set in the [Register taxable type] from the [Common master module] and the taxable type is specified in each entry screen to enter VAT.  This is not the method that enters the tax rate directly in each entry screen.

Entered VAT can be summarized in the [VAT summary sheet by taxable type]/[VAT detailed sheet by taxable type] from the [General accounting/Multi-currency accounting module].  For example, it can be used for basic materials of VAT declaration in Japan.

Keep in mind that the [Standard accounting subsystem], [Sales control/Purchase control subsystem] and [Claims/Debts subsystem] have different VAT calculation methods.

Master setting for VAT management

• Taxable type registration
  The taxable type (taxable sales, non-taxable sales, sales of no-object tax, others (with tax rate), and taxable purchases, etc.) and tax rate are set in the [Register taxable type] from the [Common master module].  
• A/C VAT object setting
  Please set the A/C // sub A/C that is the object for VAT as a "VAT item" in the [Register A/C and sub A/C] from the [Accounting master module] and set the tax type (sales/purchase) and the taxable type.  VAT entry can be done for VAT object A/C // sub A/C only.  When A/C is specified at entry, the taxable type for A/C // sub A/C is shown initially.
• VAT entry A/C registration at auto-journalization
  Temporary sales order VAT etc. sub A/C and suspended payment VAT etc. A/C and Sub A/C that are used for VAT A/C at auto-journalization are set in the [Parameter setup] from the [System custodian module].
• Parameter setup for VAT control
  Set "VAT control (accounting)" as "Yes" in the [Parameter setup] from the [System custodian module].
• Fraction adjustment method registration at tax calculation
  Fraction adjustment at tax calculation (revaluate, omit and round off) is set in the [Parameter setup] from the [System custodian module].  Fraction adjustment for sales tax and purchase tax can be set separately.  Each fraction adjustment for sales/purchase are executed according to the taxable type sales/purchase, which is specified at voucher entry.
• VAT summary type registration for correspondents (Only related sales control/purchase control subsystems)
  Select the VAT summary unit from "None," "Voucher unit" and "Detail row unit" in the [Register correspondent] from the [Common master module]. 
• Taxable type registration for goods (Only related sales control/purchase control subsystems)
  If the taxable type (sales/purchase) and tax type (internal/external) for goods are set in the [Register goods] from the [Logistics master module], the taxable type and tax type are set automatically at goods entry.  Entry is not needed.
• Charge type "VAT" registration (Only related sales control/purchase control subsystems)
  "VAT" charges are set in the [Register charges] from the [Logistics master module].  This registered charge code is not specified directly in the entry screen for sales/purchase, but it is used for the internal processes for VAT charge details at sales order/purchase entry.

How to control VAT in the accounting subsystem

In each entry screen for the [Standard accounting subsystem], the VAT summary unit is the "Voucher unit" that is not related to the setting for the correspondent "VAT summary unit."
Select the "Taxable type" and "Tax type" (internal/external) for each detailed row unit.  It is possible to have different "Taxable type" details in the same voucher.
Journal data is entered in each entry detail.  Click the "Tax calculation" button.  Then VAT A/C details are entered automatically.

How to manage VAT in the sales/purchase subsystem

According to the correspondent setting that is specified in each entry screen from the [Sales control/purchase control subsystem], the VAT summary unit is determined.

• When it is "None"
  Tax is not entered.  Tax items are not displayed.
• When it is "Detail row unit"
  Tax is calculated and displayed for each row of details.
• When it is "Voucher  unit"
  Tax is not displayed for each detail and tax is calculated and displayed for the total amount from the detailed row in the bottom spread of the screen.

When goods are specified at voucher entry, the taxable type for each goods initial display is set.  Also, it is possible to reselect the "Taxable type" manually.
However, the same voucher can not have different "Taxable type" details together, and it is not related to the correspondent VAT summary unit setting (Because discounts are considered.).

How to control VAT in the claims/debts subsystem

In each entry screen from the [Sales control/purchase control subsystem], the VAT summary unit is the "Detail row unit."  It is not related to the correspondent's VAT summary unit setup. 

About fraction adjustments

When the amount is entered in the standard currency or the entry currency on the screen, tax is calculated according to the tax rate and tax type (internal/external) that are set for the taxable type.  At that time, tax fraction adjustments may need to be considered depending on the amount and the currency.  For calculation samples refer to the following.
For fraction adjustment details, refer to "Concept of fraction adjustment in A.S.I.A."

About monthly invoice calculation

Monthly invoice VAT is calculated from the total of individual issued invoices and payment vouchers.

About prepaid VAT

When deferred data for prepaid payments is entered in the [Deferred account control module] and the prepaid VAT is entered, the pro rata amount for the prepaid VAT becomes VAT.  This is different from the usual VAT calculation. 

GST No. response

The "GST No." for each correspondent is set in the [Register correspondent] "TAX ID" from the [Common master module] so that it is possible to make a VAT (value added tax) report for each GST No. by using [VAT summary sheet by taxable type/detailed sheet].

"External" calculation procedure

When it is an external tax, select the "External" tax type in the entry screen and enter the "Amt before tax."

• When currency is standard currency
  Tax = Amt before tax × Tax rate (Tax rate that is held by taxable type master)
  Tax (SC) is set as the same amount as the tax automatically.
  When the [Company setup] "One decimal place adjustment" setting = ON, the tax also has a fraction adjustment at the first decimal place.

• When currency is foreign currency
  Please keep in mind that exchange is made in the order of rate, tax rate.
  
  (Sample)
  "Tax rate" = 0.05, [Exchange rate] = 130.11, [Parameter setup] "Fraction adjustment type (FC)" = "Omit," "Fraction adjustment (Sales tax)" and "Fraction adjustment type (Purchase tax)" = "Omit," [Company setup] "One decimal place adjustment" = "OFF"

1. Amt before tax=115.50   ...  [1]
2. Amt before tax (SC) calculation
   Amt before tax (SC) = Amt before tax × Exchange rate  
   Moreover, fraction adjustment is executed in the "Fraction adjustment type (FC)" from the system custodian [Parameter setup].
   → Amt before tax (SC) = 115.50 × 130.11=15,027.705 = 15,027.70  ...  [2]
3. Tax calculation
   Tax = Amt before tax × Tax rate (Tax rate that is held by the taxable type master)  
   Moreover, fraction adjustment is executed in the "Tax fraction adjustment type" from the system custodian [Parameter setup].  Applied fraction adjustment type details will be mentioned later.
   → Tax = 115.50 × 0.05=5.775 = 5.77   ...  [3]
4. Tax (SC) calculation
   Tax (SC) = Amt before tax (SC) × Tax rate
   Moreover, fraction adjustment is executed in the "Tax fraction adjustment type" from the system custodian [Parameter setup].
   → Tax (SC) = [2] × 0.05=15,027.70 × 0.05 = 751.385 = 751.38   ...  [4]
   
   * There is no relationship between tax that is calculated according to procedure 3 and tax (SC) that is calculated according to procedure 4. (Tax (SC) can not be calculated based on tax.)
5. Amt including tax calculation
   Amt including tax = Amt before tax + Tax
   → Amt including tax = [1] + [3] = 115.50 + 5.77 = 121.27
6. Amt including tax (SC) calculation
   Amt including tax (SC) = Amt before tax (SC) + Tax (SC)
   → Amt including tax (SC) = [2] + [4] = 15,027.70 + 751.38 = 15,799.08

Calculation procedure external foreign currency

	Amt before tax		Tax		Amt including tax
Entry (Foreign currency)	115.50	→ Procedure 3 "Amt before tax × Tax rate" (Moreover, tax fraction adjustment)	5.77	→ Procedure 5 "Amt before tax + Tax"	121.27
	↓Procedure 2 "Amt before tax × Exchange rate" (Moreover, foreign currency fraction adjustment)		Tax (SC) in not calculated based on tax
Standard	15,027.70 (15,027.00)	→ Procedure 4 "Amt before tax (SC) × Tax rate" (Moreover, tax fraction adjustment)	751.38 (751.00)	→ Procedure 6 "Amt before tax (SC) + Tax (SC)"	15,779.08 (15,778.00)

The amount in the ( ) is when "Fraction adjustment after decimal" is ON.

"Internal" calculation procedure

When it is internal, select the "internal" tax type in the entry screen and enter the "Amt including tax."

• When currency is standard currency
  Tax = Amt including tax × {Tax rate/(1 + Tax rate)}
  Fraction adjustment is executed for the result according to the "Tax fraction adjustment type."
  Tax (SC) is set as the same amount as the tax automatically.
  When [Company setup] "One decimal place adjustment" setting = ON, fraction adjustment is executed for tax at the first decimal place.
  Amt before tax = Amt including tax + Tax
• When currency is foreign currency
  Keep in mind that exchange is made in the order of rate, tax rate.
  
  (Sample)
  "Tax rate" = 0.05, "Exchange rate" = 130.11, [Parameter setup] "Fraction adjustment type (FC)" = "Omit," "Fraction adjustment (sales tax)" and "Fraction adjustment type (purchase tax)" = "Omit," [Company setup] "One decimal place adjustment" = "OFF"

1. Amt including tax = 115.50   ...  [1]
2. Amt including tax (SC) calculation
   Amt including tax (SC) = Amt before tax × Exchange rate
   → Fraction adjustment is done in the system custodian [Parameter setup] "Fraction adjustment type (FC)"
   → Amt including tax (SC) = 115.50 × 130.11=15,027.705 = 15,027.70   ...  [2]
3. Tax calculation
   Tax = Amt including tax × {Tax rate/(1 + Tax rate)}
   Fraction adjustment is done in the system custodian [Parameter setup] "Tax fraction adjustment type"
   → Tax = [1] × {0.05/(1.00 + 0.05)} = 115.50 × {0.05/(1.00 + 0.05)}  = 5.5  ...  [3]
4. Tax (SC) calculation
   Tax (SC) = Amt including tax (SC) × {Tax rate/(1 + Tax rate)}
   Fraction adjustment is done in the system custodian [Parameter setup] "Tax fraction adjustment type"
   → Tax (SC) = [2] × {0.05/(1.00 + 0.05)}  = 15,027.70 × (0.05/1.05) = 715.60476 = 715.60   ...  [4]
   
   * There is no relationship between tax that is calculated according to procedure 3 and tax (SC) that is calculated according to procedure 4. (Tax (SC) can not be calculated based on tax.)
5. Amt before tax calculation
   Amt before tax = Amt including tax - Tax
   → Amt before tax = [1] - [3] = 115.50 - 5.5 = 110.00
6. Amt before tax (SC) calculation
   Amt before tax (SC) = Amt including tax (SC) - Tax (SC)
   → Amt before tax (SC) = [2] - [4] = 15,027.70 - 715.60 = 14,312.10 

Calculation procedure internal foreign currency

	Amt before tax		Tax		Amt including tax
Entry (Foreign currency)	115.50	→ Procedure 3 "Amt including tax × {Tax rate/(1 + Tax rate)}" (Moreover, tax fraction adjustment)	5.50	→ Procedure 5 "Amt before tax - Tax"	110.00
	↓Procedure 2 "Amt before tax × Exchange rate" (Moreover, foreign currency fraction adjustment)		Tax (SC) in not calculated based on tax
Standard	15,027.70 (15,027.00)	→ Procedure 4 "Amt before tax(SC) × {Tax rate/(1 + Tax rate)}" (Moreover, tax fraction adjustment)	715.60 (715.00)	→ Procedure 6 "Amt before tax (SC) - Tax (SC)"	14,312.10 (14,312.00)

The amount in the ( ) is when "Fraction adjustment after decimal" is ON.