Prices Including Tax

IFS Applications is built to handle B2B collaborations. In most countries taxes are levied on the price charged to the end consumer. This means that prices before tax are used in trade between companies. However, some countries do not follow this concept but trade B2B with prices including tax.

IFS Applications supports both price and price including tax. The Use Price Incl Tax check box specifies the basis of the tax calculation and is available in the company, site, customer, supplier, sales part etc. This check box provides the possibility to enter either the price or the price including tax. Based on the setting on the Use Price Incl Tax check box, you can enter a value on either the Price field or the Price Including Tax field. Both the price and the price including tax are saved in the database.

The setting of the Use Price Incl Tax check box in the company is defaulted to the site, supplier and customer. The setting of the check box in the supplier and customer is defaulted to the purchase order, supplier agreement, customer order, sales quotation, customer agreement, return material authorization and shipment. The setting of the check box in the site is defaulted to the sales part, non-inventory sales part, package part, sales charge types, supplier for purchase part and purchase charge types.

If the Use Price Incl Tax check box is selected: Only the Price Including Tax field is editable and the price is non editable. The basis for tax calculation is the price including tax. The price is calculated based on the entered price including tax value and the tax code. The Use Price Incl Tax check box can only be used when the company tax regime is VAT.

If the Use Price Incl Tax check box is cleared: Only the Price field is editable and the price including tax is non editable. The basis for tax calculation is the price. The price including tax is calculated based on the entered price and the tax code.

General “Price incl of Tax” formula

The general formula for the Price Including Tax is Price * ((sum tax % / 100) +1). This will affect the customer order and sales quotation lines when you know the customer.

Example:

Currency: SEK
General Consumption VAT: 25%
Specific Customer added Surcharge VAT: 2%
Price excl. Tax (VAT): 100 SEK
Price incl. Tax (VAT): 127 SEK = 100 * (((25 / 100) + (2 / 100)) +1)

General “Price” formula

The general formula for the Price is Price Including Tax / ((sum tax % / 100) +1). This will affect the customer order and sales quotation lines when you know the customer.

Example:

Currency: SEK
General Consumption VAT: 25%
Specific Customer added Surcharge VAT: 2%
Price Including Tax (VAT): 127 SEK
Price: 100 SEK = 127 / (((25 / 100) + (2 / 100)) +1)

Dependencies - General

• Company/Address/Tax Code – Used for US Sales Tax and Mixed Tax regimes.
• Company/Invoice/Tax Information – Sets Tax regime type for the company in general.

Dependencies - Customer Order

Sales Part

• On the sales part the parameter ”Taxable” is defined. If it is set to true, taxes will be calculated for the part.
• Tax code: when working in a VAT or mixed tax regime, a tax code must be defined when the part is taxable. This will indicate the tax percentage that shall be applied to the sales part.
• If a Tax class is specified for the part, the price including tax cannot be calculated. Instead the value from the Price field will be displayed also in the Price Incl Tax field.

Price Lists

• On a price list, you can connect sales parts which belong to different sites, and those sites do not need to be connected to the same company. Therefore, on a price list you could find sales parts that belong to companies with different tax codes and tax regimes. This means that a mixture of sales parts regardless of the tax regime can be included in a price list.

Customer

• On the customer you decide whether taxes shall be applied or not. This is done by defining the tax liability on the customer’s address. This will be be reflected later on, on a e.g. customer order in the Pay Tax check box.
• When working in a Sales or Mixed tax regime, the sales tax codes are also defined per customer address.

Customer Order Line

• When the Pay Tax check box is selected, taxes are calculated if the sales part is taxable. This flag is fetched as a default value from the Customer Order header. It can manually be selected or cleared.

Dependencies - Procurement

Site

• When working in a sales tax regime, you define on the site’s address whether it is taxable or not and if so, the applicable sales tax codes for a ship-to scenario.

Supplier

• On the supplier’s invoice window, the tax liability is defined. Observe that if the IFS/Invoice module is not installed, a separate Pay Tax check box on the supplier’s purchasing data will be used instead.
• On the Supplier/Address/Tax Information tab:  tax codes are defined for the ship-from scenario in a sales tax regime.

Purchase Part

• The part taxability is defined. A purchase part can be taxable or not. If not taxable, no taxes will be calculated.

Supplier for Purchase Part

• When working in a VAT tax regime, since tax codes can differ between products there is a tax code on the supplier for purchase part.

Purchase Order Line

• When the Pay Tax check box is selected and the part is taxable, taxes are calculated. This flag is fetched as a default value from the purchase order header. It can be manually selected or cleared.

Supplier Agreement/Part Step Pricing

• Supplier agreements are connected to an Owning Site, but they can be a group agreement, meaning that they shall apply to many different sites. There is no limitation on whether those sites belong to the same company or not.
• This implies that purchase parts that belong to different sites with different tax regime can be included in the same agreement. The price including tax functionality will only work when the price is valid for just one site.