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Table of Contents 1. Purpose of the document 2
2. Assumptions and Prerequisites 2
3. Tax Setup 3
4. Subledger Accounting Setup 4
5. Accounting of Transactions with the New Rules 11
ERP CLOUD
Self-assessed Tax
Fusion Financials for EMEA
1. Purpose of the document
This document explains accounting aspects of self-assessed tax setup and functionality. Accounts are set
up for each tax rate and tax recovery rate per ledger:
Tax Recoverable Account
Tax Liability Account
Tax Expense Account
Interim Tax Account
By default, these accounts will be used for the accounting of taxable Payables invoice independent of
whether the invoice has standard tax or self assessment. Some countries in Europe have a requirement
stating that different tax recoverable account should be used when the invoice has self-assessed tax.
2. Assumptions and Prerequisites
In this document, the following entities are assumed to have already been set up:
• Data Security
• Enterprise Structure
• Tax Configuration (Tax Regime, Tax codes, statuses and rates)
• Payables System Options
• Supplier Sites
• Procurement Business Function
• Common Options for Payables
3. Tax Setup The system uses the accounts for tax rate and tax recovery rate by default for the accounting of
Payables invoices with recoverable tax. Example setup screens are shown below:
Task name: Manage Tax Rates and Tax Recovery Rates
Navigation : Navigator –> Setup and Maintenance -> Manage Tax Rates and Tax Recovery Rates
4. Subledger Accounting Setup
With Standard Accrual method, when a Payables Invoice with recoverable tax is accounted, the default
subledger accounting rules will use tax rates accounting setup. If tax recoverable account is defined on
tax recovery rate, it will be used, otherwise tax recoverable account on tax rate will be used. This applies
to invoices with both supplier-assessed and self-assessed tax.
The following images show the accounting distributions of two invoices on the same enterprise having
supplier-assessed and self-assessed respectively. You can see that same tax account is used.
Supplier-assessed:
Self-assessed:
In order to make the system use different tax recoverable and tax liability accounts for supplier-assessed
and self-assessed tax, you can setup rules that will use a specific natural account value to create
accounting for self-assessed tax. With this setup, different natural account values will be used to
account for supplier-assessed tax, and self-assessed tax. For supplier-assessed tax the natural account
value will come from tax rate or tax recovery rate, and for self-assessed tax, the natural account value
will come from the value you provided in a new rule created.
In this section you will find the setup details for modifying the Subledger Accounting rules in such a way
that the accounting of self-assessed invoice will use a different account in reference to a standard
supplier-assessed invoice.
Setup steps are as follows:
(1) Create new Account Rules
(2) Create new SLA Journal Entry Rule Set
(3) Create new SLA Accounting Method
(4) Modify Ledger Options
Following images show sample setup steps in detail:
1. Create new Account Rules
We create new account rules that we will use for self assessment.
Task name: Manage Account Rules
Navigation : Navigator –> Setup and Maintenance -> Manage Account Rules
2. Create new SLA Journal Entry Rule Set
We only want to change journal entry rules that apply to the accounting of self assessed
invoices. If you are using a seeded journal entry rule set or if you do want to keep the current
one for future reference, duplicate the rule as shown below. You can also update user created
journal entry rule sets.
Task name: Manage Subledger Journal Entry Rule Sets
Navigation : Navigator –> Setup and Maintenance -> Manage Subledger Journal Entry Rule Sets
3. Create new SLA Accounting Method
We only want to change the journal entry rule assignment that applies to the accounting of self
assessed invoices. If you are using a seeded accounting method or if you do want to keep the
current one for future reference, duplicate the accounting method as shown below. You will
only need to change your related journal entry rule set assignments. You can also update user
created accounting methods.
Perform the changes as shown in the example below:
Task name: Manage Accounting Methods
Navigation : Navigator –> Setup and Maintenance -> Manage Accounting Methods
4. Modify Ledger Options
Change the accounting method to the one you have newly defined.
Task name: Specify Ledger Options
Navigation : Navigator –> Setup and Maintenance -> Specify Ledger Options
5. Accounting of Transactions with the New Rules
There will be separate accounts for self-assessed tax and supplier assessed tax which is important if
these will be declared separately on tax returns.
The following image shows the accounting lines created for an invoice with supplier assessed tax:
The following image shows the accounting lines created for an invoice with self-assessed tax:
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