Deferred Input VAT Item from Migration Handling

[Weerakhan]

Dear Experts,

We need your advice on how to handle Deferred Input VAT items that were carried from Migration.

In our country, we cannot convert deferred input vat to input vat until we receive tax invoice document from suppplier, i.e. this step should occur after we made the payment.

Hence, there exists the balance of Deferred Input VAT from Previous Period, which we migrated from the legacy system using Direct Journal Posting.

In this period, we received the tax invoice document. Hence, we would like to convert the deferred into input, i.e.

Dr. Input VAT 100

  Cr. Deferred Input VAT 100

manually and  make sure that this journal will also go to Tax Return.

What would be the most appropriate actions? I am afraid that with manual JV posting alone, the system will not consider this journal as tax journal.

Thank you so much.

[lokesh2 · Accepted solution]

Hi Weerakhan,

In general SAP ByDesign does not support stand-alone tax migration. All tax returns should be completed in the legacy system before migration to ByDesign.

The tax accounts should be balances to zero before you migrate your data to ByDesign.

Taxes are only being migrated in combination with open items payable or receivable.

As all the tax has been reported before migration the taxes maintained in the migration template are stored as statistical taxes and are used for recalculations in case of cash discounts. These tax amounts do not show up in accounting.

Now, the appropriate way is that you can post Manual Tax Entry as you shown in the above posting and this will be considered for return run also

Note: This will taken as tax journal  only if you create this posting from Tax Management work center but if you perform manual entry from General ledger work center then will not be considered as tax journal & also will not be included in the tax return runs.

Please mark the thread as answered/helpful if your query is answered.

Thanks

Lokesh Sharma

[Weerakhan · Accepted solution]

Dear Lokesh

Thank you for your advise. In our situation, it is not avoidable to have Deferred Input VAT to migrate with the reason mentioned in the first message.

The legacy system does have Deferred Input VAT balance and there is no Open-AP corresponding to it.

By posting manual tax entry in Tax Management Work Center,

1) it requires us to post tax base amount.

2) it does not permit us to post Tax account directly.

Hence we need to perform two step postings

Document 1: Manual Tax Entry

Dr. XXX       100

Dr. Input VAT 10

  Cr. XXX      100

  Cr.YYY          10

Document 2: Journal Voucher Posting

Dr. YYY 10

   Cr. Deferred Input VAT 10

I cannot think of a smarter way to do this. Please advise