Advance payment needs to be adjusted with contract postings

[Former Member]

Hi,

As per the new Tax rule in UAE, if an advance is taken from the customer for the contracts which are going to create in future, needs to be generated with the Tax Invoice i.e. customer would be paying monthly / quarterly / half early advance payment based on the contract terms. The same needs to be given as Tax invoice to the customer by collecting the tax for advance paid.

The requirement here is , contract will be created and 1st cash flow period i.e. based on the above frequency will be posted through RERAPP needs to be adjusted with the Advance payment i.e. off setting the advance payment with the tax already posted as above.

For E.g.

Contract Period is 6 Months and the payment frequency is 3 months and yearly rent is 3000

Contract Start and End Date:01.01.2018 to 31.12.2018

Cash Flow:

Cal From Calc To Amount Tax (5%) Gross

01.01.2018 31.03.2018 3000 150 3150

01.04.2018 30.06.2018 3000 150 3150

In this case customer would be giving an advance of 3150, this is taken through FI and Tax invoice will be generated with 3150 and given to the customer. Now when the above contract posting is done for the 1st quarter, system should automatically offset the advance payment with the posting happened from RERAPP. This is because Tax will be collected two times for the same period.

If any other alternative solution is available please throw some light on the same.

Regards

J

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