New tax rate requires reduced base amount?

[moazzammubarak]

Hi all

I need to create a new tax code which requires applying 5% Federal Sales Tax on Base Amount and 5% Provincial Sales Tax of 30% of the Base Amount, which means the vendor invoice will have both taxes but Provincial Sales Tax should be calculated @ 5% of 30% of the Base Amount (not the full base amount).

This is the first time I have to create such a tax code and I understand that I will have to create a line in my calculation procedure for this Reduced Base Amount and I can calculate 5% Provincial Sales Tax using that line. However, I am struggling to understand how to get 30% of base amount on this reduced base amount line.

I would appreciate if someone could guide if this is the correct method and if so, how to pull 30% base amount on this line and if not, what is the correct step by step procedure.

Thanks for your time.

Moazzam

[moazzammubarak · Accepted solution]

I have highlighted the line created for this reduced base amount in the attached screen shot.

[former_member198650 · Accepted solution]

Hi Mubarak,

1. First you have to create a one condition for reduced base amount in OBQ1. The calculation type for the condition should have percentage and maintain the same access sequence which has maintained for the tax condition.

2. After that assign this condition in the tax procedure in OBQ3 same as you highlighted. But you have to maintain from value as 100.

3. After that change the provisional sales tax condition from step as the above condition step i.e.in your case it is 130.

4. Then after if you are using condition based tax procedure then maintain tax code for the above condition in FV11 as 30% or maintain the base amount as 30% in FTXP.

Regards,

Mukthar

[moazzammubarak · Accepted solution]

Hello Mukhtar

Thank you for your response. I did your recommended changes but when I enter vendor invoice to check taxes, it is going into iteration (I have to enter * in the line item amount and enter 4-5 times until the balance is zero). I don't know why is it behaving like that while there are no other conditions based on this step 130. Can you please have a look and pinpoint my mistake.

Thank you for your help.

Moazzam

[former_member198650 · Accepted solution]

Hi Mubarak,

What is the Provincial Sales Tax condition type in the procedure? I cannot find it in procedure, please let me know? And also let me know which tax procedure are using i.e. condition based or formula based. Share screen shot of tax rate maintenance for the tax code.

Regards,

Mukthar

[moazzammubarak · Accepted solution]

The attached screen shots have 30% base amount and the provincial sales tax lines highlighted. Provincial sales tax has condition type JC1I (Federal Sales Tax is recoverable while Provincial Sales tax is not recoverable). FTXP screen shot is also attached. I don't know whether the tax procedure is condition based or formula based (I don't understand the difference between these two).

Thanks for your help.

Moazzam

[moazzammubarak · Accepted solution]

[former_member198650 · Accepted solution]

Hi,

Share screen shot of the condition types ZBAS,JC1I & Provincial Sales tax is not recoverable condition type?

Regards,
Mukthar

[moazzammubarak · Accepted solution]

Screens for ZBAS and JC1I are attached. Provincial sales tax not recoverable means it has to be the part of the cost but that I can handle so we can ignore that for the time being, just correct tax calculation is required.

Regards

[moazzammubarak · Accepted solution]

And here is a simple example of the invoice that I want to record using this tax code:

[former_member198650 · Accepted solution]

Hi,

Maintain the ZBAS condition as shown below:

Later maintain the percentage as 30% in FTXP for the tax condition. After that try to test in.

Regards,

Mukthar

[moazzammubarak · Accepted solution]

Hi Mukhtar

This works perfectly. Thank you for your help.

Regards

Moazzam