Deferred Tax (SAP Library

Deferred Tax

Use

The Revenue Department has decreed that when you sell or buy services, a tax invoice may only be issued after the invoice has been paid. Until the tax invoice is issued (or received), any value-added tax (VAT) must be recorded in the general ledger as deferred tax. Once the tax invoice is available, you transfer the tax to a regular VAT account. This procedure requires special handling in the system.

For more information about the business processes involving deferred tax, see Deferred Tax in Accounts Payable and Deferred Tax in Accounts Receivable.

Activities

Customizing

Create tax codes for deferred tax in Customizing for Financial Accounting, by choosing Financial Accounting Global Settings ® Tax on Sales/Purchases ® Calculation ® Define Tax Codes for Sales and Purchases. Sample tax codes are provided with Country Version Thailand, for more information about which, see Tax Code.

Activate tax invoice numbering for the document types that you use to transfer the tax from the deferred tax account to the regular tax account. For more information, see Tax Invoices.

Master Data

Create a G/L account for the deferred tax. When you create the account, select Open Item Management and Line Item Display, so that it works as a clearing account for the tax. For more information, see Creating and Editing G/L Account Master Records.

Day-to-Day Activities

Enter customer invoices and vendor invoices for services as normal, but using the appropriate deferred tax code. When you save the invoice, the system automatically posts the tax to the deferred tax account that you have set up.

Later, once the payment has been made, you use the Transfer Deferred Tax program to process the tax invoices as follows:

In the case of customer invoices, once the customer has paid you, you use the program to create a tax invoice.

The system automatically transfers the deferred tax from the deferred tax account to a regular tax account.

In the case of vendor invoices, when you have paid the vendor and it has sent you the tax invoice, you use the program to enter the tax invoice.

The system transfers the tax from the deferred tax account to a regular tax account. And, if the tax amount on the tax invoice is different from the tax amount on the normal invoice, the system posts the difference to a separate tax account (see Tax Discrepancies).

The program also allows you to enter tax invoices for individual vendor items in a vendor invoice containing multiple items (see Vendor Invoices with Multiple Vendor Items).

Reporting

When you prepare the input and output tax reports, the system covers all deferred tax that has been paid and for which a tax issue has been invoiced. It is treated the same as regular input or output tax.