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Description
The proforma remittance functionality has been enhanced so that, for VAT registered contractors, VAT is now calculated on taxable items when the the contractor’s pay items at the time when a proforma remittance document is generated. That is, at the point when the corresponding timesheet a timesheet belonging to the contractor is released for pay processing from the Interpreter for pay processing.
On the proforma remittance document, the VAT amount that has been calculated when at the time of generating a proforma remittance is displayed on the document is generated is shown in the Item Tax Amount field at the pay item level and those amounts are also included in the Tax Total and the sum of the individual VAT amounts is shown in the Total VAT field at the document totals level, as highlighted in the example below.
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If VAT that is calculated for a pay item based on an item on the corresponding timesheet when the proforma remittance is generated , VAT is not calculated recalculated again when the corresponding timesheet is paid in a pay batch. Instead of being recalculated, the VAT amount amounts that was calculated when the proforma remittance was generated is have already been calculated are brought into the pay batch at the VAT pay batch stage (for more information, see …).
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A payee is considered to be a VAT registered contractor if the payee:
The VAT registration status of a payee is captured under a payee validity period on the Payee record. Irrespective of the payroll country, the system refers to the payee validity period that applies on the date when the timesheet is released from the Interpreter for pay (i.e. when the interpreted timesheet status type is set to Reviewed -Pay Only or Reviewed - Pay and Bill) to determine if the payee is VAT registered. |
Tax Point Determination
For the purposes of calculating VAT/GST when generating the proforma remittance, the system uses the date the proforma remittance is generated to determine if the contractor is VAT/GST registered, by referencing the validity period on the Payee record that applies on that date, and to determine the tax rate that applies.
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By contrast, if a manual pay item is When the contractor is paid in a pay batch, manual items can be added to the contractors pay when the contractor is paid in contractor’s pay. In a pay batch, the system references the payee validity period that corresponds to the timesheet period to determine if the payee is VAT /GST registered and therefore if VAT /GST is to be calculated . In some infrequent scenarios, such as where the contractor may not be registered …and the VAT rate that is to apply. Therefore, there can be infrequent situations where, for example, the payee’s VAT registration status or the VAT rate has changed from one period to the next and because different periods are referenced at the point of proforma remittance generation versus at the point of processing a pay batch, VAT may not be calculated on the manual items paid in the pay batch or may be calculated using a different rate than that applied at the time when VAT was calculated based on the timesheet items. |
Benefits
This enhancement allows the proforma remittance functionality to be used to generate documents that meet the definition of a valid tax invoice when issued to a VAT/GST registered contractor. In turn, that allows the pay company to claim the VAT/GST that is paid forward to the contractor at the time when the proforma remittance is generated without the need to wait until the contractor is paid.
For other enhancements in this release that facilitate using the proforma remittance functionality to generate tax invoices, see …
Configuration
No configuration required.
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To display the VAT /GST value on the proforma remittance document, the existing Tax Amount field |