Setting for Use tax on supplier invoice

[Artem Braga]

Hello

I'm looking for the possibility to set-up taxes in Tryton so that a use taxes for the US and similar taxes could be handled. 

Use tax is the following: a company can buy a good/service at a net price (without tax) and then- should declare a use tax liability on that purchase and pay this liability to the government.

In an sample scenario- for a $ 100 net price purchase a buyer must declare a 10% use tax liability and pay $10 of use tax to government. 

Wondering how use tax can be set-up in Tryton, because:

1. Supplier invoices in Tryton can have taxes only with group of "purchase" or "both" kind or taxes without group.

2. If tax belongs to the group of "purchase" or "both" kind or does not belong to any group, tax amount from supplier invoice is booked on the debit side of balance sheet account (asset).

Is there a possibility to apply a tax on a supplier invoice, so that tax amount appeared on the credit side (liability) of balance sheet account? If yes, what should be a tax settings for that? 

Thank you 

Artem

[Cédric Krier]

On 2017-03-24 03:16, 'Artem Braga' via tryton wrote:
> Use tax is the following: a company can buy a good/service at a net price
> (without tax) and then- should declare a use tax liability on that purchase
> and pay this liability to the government.
> In an sample scenario- for a $ 100 net price purchase a buyer must declare
> a 10% use tax liability and pay $10 of use tax to government.
>

> Is there a possibility to apply a tax on a supplier invoice, so that tax
> amount appeared on the credit side (liability) of balance sheet account? If
> yes, what should be a tax settings for that?

For what I understand you still have to debit the tax amount on the tax
account but you want to credit it not on the supplier expense account
but on an account for government liability.

I think you can do that by defining the tax with two opposite children
taxes with each one having the right tax account.

--
Cédric Krier - B2CK SPRL
Email/Jabber: cedric...@b2ck.com
Tel: +32 472 54 46 59
Website: http://www.b2ck.com/

[Artem Braga]

пятница, 24 марта 2017 г., 13:05:06 UTC+2 пользователь Cédric Krier написал:

Thank you for the answer. 

The goal is to have a possibility to book a tax amount on the balance sheet credit side (liability) from a supplier invoice. 

What do you mean by saying "opposite" children taxes? 

Thank you 

 

[Cédric Krier]

On 2017-03-26 15:02, 'Artem Braga' via tryton wrote:
>
>
> пятница, 24 марта 2017 г., 13:05:06 UTC+2 пользователь Cédric Krier написал:
> >
> > On 2017-03-24 03:16, 'Artem Braga' via tryton wrote:
> > > Use tax is the following: a company can buy a good/service at a net
> > price
> > > (without tax) and then- should declare a use tax liability on that
> > purchase
> > > and pay this liability to the government.
> > > In an sample scenario- for a $ 100 net price purchase a buyer must
> > declare
> > > a 10% use tax liability and pay $10 of use tax to government.
> > >
> > > Is there a possibility to apply a tax on a supplier invoice, so that tax
> > > amount appeared on the credit side (liability) of balance sheet account?
> > If
> > > yes, what should be a tax settings for that?
> >
> > For what I understand you still have to debit the tax amount on the tax
> > account but you want to credit it not on the supplier expense account
> > but on an account for government liability.
> >
> > I think you can do that by defining the tax with two opposite children
> > taxes with each one having the right tax account.
>

> Thank you for the answer.
> The goal is to have a possibility to book a tax amount on the balance sheet
> credit side (liability) from a supplier invoice.

And as far as I see, there is no restriction to select such account for
the tax.

> What do you mean by saying "opposite" children taxes?

I'm talking about a 10% and -10% because at the end you have no taxes to
pay to the supplier.

[Artem Braga]

понедельник, 27 марта 2017 г., 1:40:07 UTC+3 пользователь Cédric Krier написал:

Hello

thank you for help with this question. Your solution to have a two-child taxes with the opposite signs works for a supplier invoice, but not fully. I'd like to explain why on the case described below.

So, as previously discussed, there is a need to have a possibility to book a use tax (https://en.wikipedia.org/wiki/Use_tax). Use tax is levied on the purhcases, not on the sales. So, when a company or private person purchases $100 worth of goods, he needs to recognize and book tax liability of 10%, or $10 (just an example). These $10 of use tax liability should be booked as a credit amount on the use tax liability account.

 ========================
 The summary of transactions are:

 Debit supplier expense      +$100
 Credit accounts payable    -$100

 ==========================
 Debit use tax expense       +$10
 Credit use tax liability         -$10

 ==========================

When it comes to Tryton, it is possible to set up such liability account (example- "use tax liability") and link tax to this account. As you rightfully said, supplier invoice should be booked for the amount of $100 and $10 tax is paid not the supplier, but to the government.

If I follow this advice and set up two opposite child taxes (-10% and 10% rates) I will get "use tax liability" account credited (as required) but also debited for the same amount. So the balance on this account will be always equal to zero after such transactions. So, here is the summary of transaction if to follow that way:

========================
The summary of transactions are:

Debit supplier expense      +$100
Credit accounts payable    -$100
 ==========================
Debit use tax liability      +$10
Credit use tax liability         -$10
 ==========================

And Im looking for a tax set-up, so that supplier invoice document could produce the following account moves:

==========================
Debit use tax expense       +$10
Credit use tax liability         -$10

==========================

Do you think it is possible to have with the current Tryton capabilities?

Thank you 
Artem

 

[Cédric Krier]

On 2017-03-27 07:01, 'Artem Braga' via tryton wrote:
> If I follow this advice and set up two opposite child taxes (-10% and 10% rates)
> I will get "use tax liability" account credited (as required) but also
> debited for the same amount.

Why are you configuring to debit the same account?

[Artem Braga]

понедельник, 27 марта 2017 г., 19:40:10 UTC+3 пользователь Cédric Krier написал:

Thank you, I've got your point: 

Debit expense for the child tax +10%

Credit tax liability for the child tax -10%

Best regards

Artem