FrontAccounting forum — South African VAT Increase

Re: South African VAT Increase

null@example.com (poncho1234) — Tue, 27 Mar 2018 01:16:39 +0000

@seahawk aka Wynand
1. For Items:- What happens if you have different rates of VAT eg 8% 10% & 19% then you would have a different item tax type for each rate, so on the day of the C/O create the new different taxes, 9%, 11% & 20% and assign the relevant item tax type to its new tax rate, not tried this, but no individual item setting would be touched.

To clarify:-
2. For Suppliers & Customers:- each customer is assigned with a tax group, lets say this is called VAT with a rate of 14%, then create a new tax for 15%, assign this to the tax group VAT, so now all customers and suppliers will be charged VAT @ 15%. Should you need to create a credit note, create a new tax group call 'VAT@14%' with an assigned tax of 14% change the relevant supplier/customer to this tax group, create the credit note, change supp./cust. tax group back.

I like your idea of taxes by date.

Re: South African VAT Increase

null@example.com (seahawk) — Mon, 26 Mar 2018 07:33:43 +0000

Thanks everyone for your input. Much appreciated @poncho1234 and @apmuthu.

Maybe we should be able to create a VAT with dates attached to it.

Lets say that we have a start date and end date for 14% VAT and then create new VAT for 15% with new Start date and end date some date in future untill new VAT rate is created.

I think that people with line item vat per stock item would have a nightmare. Depending on the number of suppliers and clients could also be time consuming.

I will make a copy as a training database and then play around with it to find the best solution for each client.

Re: South African VAT Increase

null@example.com (apmuthu) — Wed, 21 Mar 2018 19:25:58 +0000

Wiki-ed it.

Re: South African VAT Increase

null@example.com (poncho1234) — Mon, 19 Mar 2018 16:54:50 +0000

No problem, hope it helps someone.
It was 2 years ago now, from memory I only did what needed to be done... 1st new tax, then how it is applied.

As always create a backup 1st.

So for Wynand's credit note case, revert tax for customer, create credit note, then change tax back to new tax will work.

Re: South African VAT Increase

null@example.com (apmuthu) — Mon, 19 Mar 2018 16:31:52 +0000

@poncho1234: It is not everyday we have the tax rates being changed. Hence your experience is valuable. Thanks for the feedback.

Re: South African VAT Increase

null@example.com (poncho1234) — Mon, 19 Mar 2018 14:08:16 +0000

No, an item has a tax type assigned to it, this remains the same. The tax rate is changed with the customer (with the tax group); changed the rate on each customer; previous invoices created remained at old rate.

Same needs to be done with suppliers

Re: South African VAT Increase

null@example.com (apmuthu) — Mon, 19 Mar 2018 13:32:16 +0000

@poncho1234: Must we then create all new items for the new tax rate so as to preserve the old items with the old tax rate?

Re: South African VAT Increase

null@example.com (poncho1234) — Mon, 19 Mar 2018 13:07:02 +0000

Colombia had a VAT increase last year, in the end we created a new tax and applied from C/O date. The old VAT rate was renamed and in time was marked as inactive. There were no issues as each tax is distinct, so as far as credit notes; the tax rate that was applicable was applied.

I would definitly use the same method for any future tax changes

Edit - just to be clear on the names:-

The old VAT rate you have probally called just 'VAT' change this to 'VAT@ 14%' and create a new tax called 'VAT' with the new rate of 15%. Create any necessary Tax Groups ~~and Item Tax Types~~ so that the new VAT is applied in the same way as the old VAT changing names as necessary.

Re: South African VAT Increase

null@example.com (apmuthu) — Mon, 19 Mar 2018 11:57:51 +0000

Make a credit note in the new fiscal with the new 15%. Pass an adjustment Journal Entry for the difference.

@Joe: What is the best practice here - an editable Tax Rate?

South African VAT Increase

null@example.com (seahawk) — Mon, 19 Mar 2018 11:27:19 +0000

RSA is increasing VAT from 01/04/2018 from 14% to 15% VAT.

I have seen only one suggestion to:

1. Complete all transactions by 31 March 2018
2. Change the Input and Output Vat % on the 01/04/2018 to 15%

This creates a problem when you have to do credit notes. If the invoice was issued at 14%, the credit note should also be done with 14% VAT.

I there any other workable solution or is this the only way to deal with the increase in VAT.

Regards
Wynand