Description
The proforma remittance functionality has been enhanced so that, for VAT/GST registered contractors, sales tax (VAT/GST) is calculated on taxable items when the proforma remittance document is generated at the point when the corresponding timesheet is released from the Interpreter for pay processing.
On the proforma remittance document, the VAT/GST amount that has been calculated when the document is generated is shown in the Tax Amount field at the pay item level and those amounts are also included in the Tax Total field at the document totals level.
Definition of a VAT/GST Registered Contractor
To be considered a VAT/GST registered contractor, a payee must meet the following criteria depending on the payroll country:
United Kingdom
Tax Type must be Contractor or CIS
Payee Type must be Contractor, 3rd Tier Agency, Umbrella or CIS
VAT Registered must be ticked
Australia
Tax Type must be Company
Payee Type must be Company, 3rd Tier Agency or Umbrella
GST Registered must be ticked
New Zealand & Non-payroll Countries
Tax Type must be Contractor
Payee Type must be Contractor, 3rd Tier Agency or Umbrella
GST Registered must be ticked
The VAT/GST 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 registered for VAT/GST.
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.
By contrast, if a manual pay item is added to the contractors pay when the contractor is paid 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 …
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.
To display the VAT/GST value on the proforma remittance document, the existing Tax Amount field