Summarization of Tax Lines
Use
Using this function, you can summarize (group together) the tax lines for each company code.
Prerequisites
You activated tax summarization in Customizing. In Customizing for
Flexible Real Estate Management
(RE-FX), choose
Accounting
Automatically Generated Accounting Documents
Summarize Documents
Activate Document or Tax Summarization in Company Code
.
Features
When tax summarization is active, the system summarizes line items using the following criteria before the tax lines are generated:
Underlying tax code
Tax category of the account (G/L account or reconciliation account)
Tax jurisdiction code (if there is one)
Account type
Gross/net indicator of condition
Currency
A summation tax line is generated for each of these summarized lines. The system displays tax lines on G/L accounts and subledger accounts separately.
Tax-relevant debit and credit amounts are balanced against each other. If they balance to zero, then a tax line might not be generated.
Due to the new calculation of the summation tax lines, there could be rounding differences within the document. The reason is that the tax for the total of the lines is not necessarily the same as the total of the taxes on the individual lines. This balance is distributed as follows, dependent on whether gross conditions are involved:
Gross conditions are in document:
Since the gross amount is specified in the contract, gross amounts are not allowed to be changed. Therefore, the system generates a separate G/L account item that clears the balance. Account key RDF is used for account determination.
Gross conditions are not in document:
The system modifies the gross amount consecutively in the subledger lines until the balance is fully distributed.
Example
A monthly net condition with 16% tax on sales/purchases is posted for three months.
Condition Amount |
6.28 |
Tax Amount |
1.00 |
Gross Amount |
7.28 |
Without tax summarization:
Customer
7.28
Revenue
-6.28
Customer
7.28
Revenue
-6.28
Customer
7.28
Revenue
-6.28
Tax
-1.00
Tax
-1.00
Tax
-1.00
With tax summarization:
The revenue lines are summarized with the result 3* 6.28 = 18.84. The tax amount is 16% of 18.84 = 3.01. In contrast, the total tax amount without summarization was 3.00. The balance is distributed first to the first line, then the second, and so on. In our example, only the first line would be changed, since the balance is only 1 cent.
Customer
7.29
Revenue
-6.28
Customer
7.28
Revenue
-6.28
Customer
7.28
Revenue
-6.28
Tax
-3.01