Description
The proforma remittance functionality has been enhanced so that, for VAT registered contractors, VAT is now calculated on the contractor’s pay items at the time when a proforma remittance document is generated. That is, at the point when a timesheet belonging to the contractor is released for pay processing from the Interpreter.
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VAT that is calculated when the proforma remittance is generated is not recalculated again when the corresponding timesheet is paid in a pay batch. Instead, the VAT amounts that 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. |
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When the contractor is paid in a pay batch, manual items can be added to the 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 registered and therefore if VAT is to be calculated and the VAT rate that is to apply. Therefore, Because of the different periods that are referenced 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, so 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 itemsto timesheet items for which VAT had been calculated when the proforma remittance was generated. |
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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