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Sales Tax Group - Exempt Button

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Posted on by Dhanicca Macatangay

353

Hi There!

I hope you are all well.

May I seek for your assistance for me to determine how can I do the setup which has the below requirement.

Scenario: In compliance with the PHL taxation, all goods/services availed by Senior Citizens should be VAT exempt but the vat that was deducted on the amount should also be presented on the receipt and transaction as a deduction on the amount of goods/services.

Example:

Item A (Tax inclusive amount): P112

If sold to Senior Citizen:

Item A: P112

12% VAT: 12

Amount to be paid by Senior Citizen: P100

What we tried is to create a sales tax group and tick the box exempt on the added sales tax code on the setup section but we still assigned a VAT percent.

Result: No VAT was recorded and/or deducted on the journal created.

Categories:

Financial Management

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MauricioSaldana on at

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RE: Sales Tax Group - Exempt Button

Hi Dhanicca,

I investigate further your case and this is a very specific case for Philippines we don't have a localization package for this country but there are some partners providing a ad-hoc solution for this process and some others. So basically there are two option either you customize the system or you can contact one of these partners so they can provide you their already developed solution.

Find below some links for further information for partners providing some Philippines localization solution

http://apac.hitachi-solutions.com/microsoft-dynamics-365-for-finance-and-operations/erp-philippines/

https://appsource.microsoft.com/en-us/product/dynamics-365-business-central/PUBID.e-pasi-1156349%7CAID.philwithholdingtax%7CPAPPID.abc622d1-0d07-40e3-9518-9a9adc77322a?tab=Overview

Regards
Dhanicca Macatangay 353 on at

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RE: Sales Tax Group - Exempt Button

Hi Mauricio,

I hope this illustration can be of a help.

What we are trying to come up with is to display the amount of vat deducted, from the sale to a senior citzen, on the face of the receipt.

Source:https://mpm.ph/compute-senior-citizen-discount/
MauricioSaldana on at

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RE: Sales Tax Group - Exempt Button

Hi Dhanicca,

Thanks for replying, I think the best way to really understand the issue is to have an example of all the ledger postings you are looking to have at the end. At what is the tax authority asking you to inform.

By definition if a transaction is tax exempt that means you don't charge tax so it is confusing that you want to calculate the tax (12 in your example) and later say you don't want to charge the customer with this tax.

A case that I manage some time ago: Customer purchasing cleaning supplies from a distributor, which are taxable but in this case he was purchasing with the intention of selling those supplies, in this case the customer has a tax exemption, therefor in this transaction the tax will be zero but with tax exempt code specifying why the tax is zero so when doing the tax declaration you can justify why you purchase those items with tax zero and in many case you need to print on the invoice the reason (legal text) explaining why it is tax exempt.

REgards
Dhanicca Macatangay 353 on at

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RE: Sales Tax Group - Exempt Button

We are only using doing the simulation on the standard demo instance of D365 FinOps
Dhanicca Macatangay 353 on at

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RE: Sales Tax Group - Exempt Button

Hi Mauricio,

Apologu for the confusion. Philippine taxation is really complicated. The item itself is taxable(not vat exempt) what is vat exempt is the customer itself.

We are looking for a way on how we can present on the receipt that a tax has been deducted on the item because it was sold to a vat exempt customer.
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Rahul Mohta 21,010 on at

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RE: Sales Tax Group - Exempt Button

are currently using any country specific global tax engine feature? if not would suggest to have a look at

https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/tax-engine

docs.microsoft.com/.../extend-tax-engine-configurations
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MauricioSaldana on at

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RE: Sales Tax Group - Exempt Button

Hi Dhanicca,

I'm a bit confuse by definition if you are selling an item with a tax exemption you should not calculate any tax amount. Normally you calculate a zero tax amount with an exempt code and also you specify the legal text on why this is exempt.

To your example if you post an invoice like with VAT 12 and the customer only paying 100, what is happening with the extra 12?

Maybe if you provide an example on what the full voucher should look like we can help you more accurately.

Thanks