Tax Code Substitution 

Use

By default, the Create Acquisition Tax Accruals program generates tax accruals using the same tax code as in the original purchase order. However, because the tax authorities in the Czech Republic and Slovakia require companies to post acquisition tax accruals as nondeductible taxes, the program must substitute the tax code in the purchase order (which is deductible) with one that is nondeductible.

Activities

For the Czech Republic and Slovakia only: In Customizing for Financial Accounting (FI), specify which tax code the system is to post acquisition tax accruals with, by choosing Financial Accounting Global Settings ® Tax on Sales/Purchases ® Basic Settings ® Settings for Tax on Sales/Purchases in the Czech Republic or Slovakia ® Acquisition Tax ® Specify Tax Codes for Acquisition Tax Accruals.

Example

A buyer in a Czech company creates a purchase order for sheet metal from a vendor in Germany. The purchase order item has the tax code E1.

A few days later, the warehouseman in the Czech company records the delivery of the metal. By the 15th of the following month, the invoice has still not arrived, so the accountant creates an acquisition tax accrual.

The program automatically posts the taxes using the tax code Z1 instead of E1.