Differential Taxation

This chapter describes how to use differential taxation in our ERP solution.

The basic idea behind differential taxation is that only the difference between the purchase and sales price of the item is subject to VAT. The contents of this chapter are divided into the following sections:

• Setting Up Order Type for Differential Taxation
• Setting Up a VAT Prod. Posting Group for Differential Taxation
• Setting Up a Sales Account for Differential Taxation
• Setting Up a Sales VAT Deduction Account for Differential Taxation
• Setting Up Stockkeeping and Pricing Wizard
• Activating Differential Taxation on Service Item Card
• Posting Unit Costs for Service Items Retrospectively
• Process Example

Setting Up Order Type for Differential Taxation

To be able to use the differential taxation functionality, you have to set up an order type for differential taxation. More information on setting up order types can be found under Setting Up Order Types. Certain columns on the Order Types page are particularly important for the differential taxation setup. These columns are described in the following table:

Setting Up a VAT Prod. Posting Group for Differential Taxation

This section describes how you set up the VAT prod. posting group for differential taxation. To do so, proceed as follows:

• Use the quick search (ALT+Q) to find the General Ledger Setup page.
• Navigate to the Equipment DMS FastTab.
• In the VAT Product Posting Group (Differential Taxation) field, enter the correct product posting group or create a new VAT product posting group.

You have successfully set up the VAT product posting group for differential taxation.

Setting Up a Sales Account for Differential Taxation

This section describes how you set up a sales account for differential taxation. To do so, proceed as follows:

• Use the quick search (ALT+Q) to find the General Ledger Setup page.
• Navigate to the Equipment DMS FastTab.
• In the Differential Taxation - Sales Account field, enter a sales account or create a new account.

You have successfully set up a sales account for differential taxation.

Setting Up a Sales VAT Deduction Account for Differential Taxation

This section describes how to set up a sales VAT deduction account for differential taxation. To do so, proceed as follows:

• Use the quick search (ALT+Q) to find the General Ledger Setup page.
• Navigate to the Equipment DMS FastTab.
• Enter an account into the Diff. Taxation Sales VAT Deduction Account field or create a new account.

You have successfully set up the sales VAT deduction account for differential taxation.

Setting Up Stockkeeping and Pricing Wizard

This section describes how to set up the stockkeeping and pricing wizard. To do so, proceed as follows:

• Use the quick search (ALT+Q) to find the General Ledger Setup page.
• Navigate to the Equipment DMS FastTab.
• Specify the item journal template that should be used for the stockkeeping and pricing wizard in the Stockkeeping and Pricing Wizard Template field.
• Specify the item journal batch that should be used for the stockkeeping and pricing wizard in the Stockkeeping and Pricing Wizard Batch field.

You have successfully set up the stockkeeping and pricing wizard. Your changes are saved automatically.

Activating Differential Taxation on Service Item Card

This section describes how to activate differential taxation on the service item card. To do so, proceed as follows:

• Use the quick search (ALT+Q) to find the Service Items page.
• Click the desired service item.
• Navigate to the Customer FastTab.
• Activate the Differential Taxation (§ 25a) toggle switch.

You have successfully activated differential taxation for a service item and can now use the service item for differential taxation in a sales order. If a trade-in is posted first and then a sales order is created (e.g., in the case of a trade-in and resale of a used machine), the toggle switch for differential taxation is set automatically. More information on this process can be found under Process Example.

Posting Unit Costs for Service Items Retrospectively

You can retrospectively post the unit cost for a service item. This is necessary, e.g., if the existing unit cost is accidentally lost after a data migration. Retrospectively posting the unit cost allows you to carry out a differential taxation as usual. To post the unit cost of a service item retrospectively, proceed as follows:

• Use the quick search (ALT+Q) to find the Service Items page.
• Select the service item for which you want to retrospectively post the unit cost or create a new one.
• The Service Item Card is displayed.
• Click Home > Post base value and quantity for diff. tax. in the menu bar.
• The Stockkeeping and Pricing Wizard is displayed.
• Enter the unit cost of the service item in the Amount field.
• Click OK to confirm your entry.
• A dialog window opens where you can confirm the new total amount.
• To confirm, click Yes.
• Another dialog window opens, asking if you want to post the amount.
• To confirm, click Yes.
• An Item Ledger Entry is posted.
• Activate the Differential Taxation (§ 25a) toggle switch in the Customer FastTab.

You have successfully posted the unit cost of a service item retrospectively. You can now use the service item for differential taxation as usual.

Process Example

Process Example

This section describes an example process from the trade-in of a service item through to the sale with differential taxation. The initial scenario assumes that a used machine is accepted as a trade-in from a customer and subsequently sold under the differential taxation scheme.

Step 1: Checking Service Item

• Use the quick search (ALT+Q) to find the Service Items page.
• Open the desired service item.
• Make sure that the service item is linked to an item.
• The Differential Taxation (§ 25a) toggle switch must not be activated at this point.
  

Step 2: Creating Trade-In

• Use the quick search (ALT+Q) to find the Trade-Ins page.
• Click New in the menu bar.
• In the General FastTab, select the customer from whom the service item is taken in as a trade-in in the Customer No. field.
• Select the order type for differential taxation in the Order Type field in the General FastTab.
• Optional Fill in the other fields in the General FastTab as needed.
• Navigate to the Lines FastTab.
• To add the desired service item, click Functions > Add Service Item in the menu bar of the Lines FastTab.
• Enter the desired trade-in price into the Trade-In Excl. VAT column.
• Optional Fill in the other columns in the trade-in line as needed.

Step 3: Posting Trade-In

• In an open trade-in card, click Posting > Post... in the menu bar.
• In the dialog window, select whether you want to ship, invoice, or ship and invoice the trade-in.
• Click OK to confirm your selection. After posting, the service item is in inventory. The Differential Taxation (§ 25a) toggle switch is automatically enabled for the service item. The corresponding G/L entries are posted according to the setup.

Step 4: Creating Sales Order

• Use the quick search (ALT+Q) to find the Sales Orders page.
• Click New in the menu bar.
• Select the order type for differential taxation in the Order Type field in the General FastTab.
• Optional Fill in the other fields in the General FastTab as needed.
• To add the service item to the sales line, click Functions > Add Service Item in the Lines FastTab. The system automatically checks whether the service item is enabled for differential taxation.
• Enter the sales price into the Unit Price Excl. VAT column. The system automatically calculates the margin between the purchase price and the sales price as well as the VAT included in the margin and creates the corresponding G/L account lines according to the setup.
• Optional Fill in the other columns in the sales line as needed.

Step 5: Posting Sales Order

• In the menu bar of the open sales order, click Home > Release > Release. The status of the sales order changes to Released.
• Click Home > Preview Document > Post... in the menu bar.
• In the dialog window, select the Ship and invoice option.
• Click OK to confirm your selection. The corresponding G/L entries are posted according to the setup.
• A dialog window is displayed asking whether you want to open the created invoice.
• To confirm, click Yes.
• Click Print/Send > Print... in the menu bar.
• Optional Customize the settings in the Options FastTab of the print wizard as needed.
• Click Print to print the invoice. A note regarding differential taxation in accordance with § 25a UStG is printed on the sales invoice. VAT is not shown separately as it is calculated only on the margin.