Automate differential taxation with SAP Business One Cloud
Differential taxation is important when trading in used moveable tangible property. It should be avoided that sales tax is calculated in full on the entire used/refurbished item when it is resold. Sales tax is only calculated and paid for the difference between the purchase price and the sales price.
For the application of the differential taxation it is assumed that
- there is a resale,
- the item was acquired in the Community area and
- no sales tax or differential tax was incurred when the items were purchased
The SAP Business One standard does not take differential taxation into account.
We have developed a solution: With a program extension, posting records can be generated automatically in the system background. In this way, you can carry out your differential taxation in an uncomplicated, automated and correct accounting manner.
In detail this means:
As soon as an A/R invoice with an item subject to differential taxation is created in the SAP Business One Cloud, two journal entries are automatically created:
- The first journal entry posts the revenue from the invoice to an interim revenue account.
- A second journal entry posts the untaxed proceeds to accounts 8193 (SKR 03) or 4240 (SKR 04) and the taxed proceeds to accounts 8191 (SKR 03) and 4220 (SKR 04). At the same time, the tax is calculated on the difference between the purchase price and the sales price, and the interim revenue account is corrected.
The journal entries generated in SAP Business One Cloud can be seen in the screenshots below:
The training document for configuring and using differential taxation
Do you trade in used goods and use differential taxation?
We look forward to an interesting conversation