Dear Members,
May i know is there any difference between in setups for Non Recoverable tax and Recoverable Tax.
Thanks in Advance
Non Recoverable Tax
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Hi,
<b>Non recoverable Tax</b> nothing but we don't recover anything from Paid Tax Amount, Ex: Sales Tax and VAT on Expense and Fixed Assets (In case of End Consumers)
<b>Recoverable Tax</b> nothing but we recover Some or Full of the Tax amount which we paid already. Ex: VAT on Inventory Items, Some Geography or Product Exemptions or Rebates
Most of the Cases the Company's have Sales tax and VAT,
For <b>Sales Tax</b>, The company doesn't recover any amount and Treats all amount as Expense...so for this <b>Tax Rates</b> define is enough and no need to setup <b>Recoverable Tax Rates</b>.
Ex: IF Sales Tax is 3%, we need to set up as follows.
Tax rate -> 3%....No need to define Recovery rates.
For <b>VAT</b>, The company Recovers Full (100%) amount for Inventory Items (Make the product and sell to Customers); and Don't Recover(0%) any amount for Expense items and Fixed Asset Purchases because the company is End Consumer for this,......so for this we need to Define <b>Tax Rate</b> and <b>Recoverable Rates</b> ( 0% and 100% separately).....we need to assign, for which Transactions or Accounts we are Recovering and not Recovering the amounts in Tax rules through Determining factors.
Ex: IF VAT IS 4%, we need to set up as follows.
Tax rate -> 4%
Recoverable Rate ->100%
Recoverable Rate ->0%
Based on our requirement we can define Various Tax Recovery rates Like 2%,5%,10%,.... (not only 0% and 100%).
Thank you,
Anjireddy
<b>Non recoverable Tax</b> nothing but we don't recover anything from Paid Tax Amount, Ex: Sales Tax and VAT on Expense and Fixed Assets (In case of End Consumers)
<b>Recoverable Tax</b> nothing but we recover Some or Full of the Tax amount which we paid already. Ex: VAT on Inventory Items, Some Geography or Product Exemptions or Rebates
Most of the Cases the Company's have Sales tax and VAT,
For <b>Sales Tax</b>, The company doesn't recover any amount and Treats all amount as Expense...so for this <b>Tax Rates</b> define is enough and no need to setup <b>Recoverable Tax Rates</b>.
Ex: IF Sales Tax is 3%, we need to set up as follows.
Tax rate -> 3%....No need to define Recovery rates.
For <b>VAT</b>, The company Recovers Full (100%) amount for Inventory Items (Make the product and sell to Customers); and Don't Recover(0%) any amount for Expense items and Fixed Asset Purchases because the company is End Consumer for this,......so for this we need to Define <b>Tax Rate</b> and <b>Recoverable Rates</b> ( 0% and 100% separately).....we need to assign, for which Transactions or Accounts we are Recovering and not Recovering the amounts in Tax rules through Determining factors.
Ex: IF VAT IS 4%, we need to set up as follows.
Tax rate -> 4%
Recoverable Rate ->100%
Recoverable Rate ->0%
Based on our requirement we can define Various Tax Recovery rates Like 2%,5%,10%,.... (not only 0% and 100%).
Thank you,
Anjireddy
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