Title:

Company Tax Locations / Tax Codes Overview

Products: Paramo Pro, WRC
Last Updated: 10 April 2015 
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Tax Locations

Tax is charged using tax locations and tax codes. A tax location is equivalent to a tax authority.   For example all invoiced shipments to destinations in the United Kingdom must charge VAT which is payable to the UK Customs and Excise. These customers must be assigned a UK VAT tax location and the standard UK vat code

Each Tax Location must have atleast one tax code. Additional tax codes can be applied on the taxable amount or accumulatively. A typical tax location in the UK would be:

Tax Location Code and Description            

UK - VAT             UK Customs and Excise

Standard Tax Code and Rate

VAT @ 20%       Tax Shipping: Yes

An Item Tax Code Filter (if used)

VATREDUCED @ 7%   

Every customer and supplier must be associated with a tax location, even if no tax is charged.  The tax code(s) are displayed on the Sales Acknowledgement, Sales Invoice, Credit Note, Purchase Order and Debit Note.  A tax location can be easily associated when importing customers or suppliers.

Tax Locations - Inventory Items Filter

The item line price will be taxed according to the customer or supplier or supplier tax location codes.  However an item number can attract a lower rate of tax (or it may be non taxable) from the standard. By assigning tax codes to item numbers you can filter the item line price out of the standard tax location calculation, and calculate the line price tax separately.

For example: A customer with a UK tax location uses a VAT tax code of 20%. A line item can be assigned a special tax code of 7%.  The invoice will display the tax charged for each code.  

Tax and the General Ledger

An Input Tax account and an Output Tax account are preloaded. The balance of these two acccounts provides the total tax liability at any point.

A single tax account (e.g VAT account) can be setup,  by pointing the input tax and output tax defaults to the same account no.  The balance of this acccount provides the total tax liability at any point.

Tax Journal

A number of tax journals are used for for both input and output tax. The tax journals for output tax include:

Input tax journals are a mirror image of the above journals.

Tax charged on invoices is viewable from the tax location reports for output and input tax. You can view tax location - tax code summary totals for any return period. For more information, see preparing a VAT return

Tax Locations / Codes Administration

Tax management