<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tc/onlinemanual/000138" xml:lang="en">
   <Header>
      <Title>To adjust tax for deductions</Title>
      <Keyword type="header" order="d1e1144218">
         <Level1>Tax adjustments</Level1>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>If you create a sales invoice, the tax amount is calculated and
		posted to the tax ledger account. The tax calculation is based on the invoice
		amount.</Paragraph>
      <Paragraph>If the payment amount differs from the invoice amount due to a
		discount, the deduction of late payment surcharges, or payment differences, LN can adjust the tax
		amount.</Paragraph>
      <ProcedureList>
         <ListIntro>To set up tax amounts adjustment, use the following
		  sessions:</ListIntro>
         <ListItemHead>
            <GUIRef href="/baanerp/tf/cmg/tfcmg0100s000" role="session">CMG Parameters (tfcmg0100s000)</GUIRef>
         </ListItemHead>
         <ListItem> 
            <List>
               <ListItem>Select the <GUIRef href="/baanerp/tf/cmg/tfcmg0100s000#tfcmg000.avat" role="manual">Adjust Tax for Deductions</GUIRef> check box. LN calculates the tax
				adjustment amounts based on the discount amount, the deducted late payment
				surcharge, or the accepted payment difference.</ListItem>
               <ListItem>In the <GUIRef href="/baanerp/tf/cmg/tfcmg0100s000#tfcmg000.dedu" role="manual">Ledger Account for Deductions by</GUIRef> field, select <GUIRef href="/baanerp/tf/domains/cmg.dedu#vatcode" role="option">Tax code</GUIRef> to specify the ledger accounts for the tax adjustments for each
				tax code and country combination or select <GUIRef href="/baanerp/tf/domains/cmg.dedu#group" role="option">Financial BP Group</GUIRef> to specify the ledger accounts for each financial business
				partner group.</ListItem>
            </List>
         </ListItem>
         <ListItem> 
            <List>
               <ListIntro>Depending on your selection, specify the ledger accounts
				for the tax adjustments in one of the following sessions:</ListIntro>
               <ListItemHead>
                  <GUIRef href="/baanerp/tf/cmg/tfcmg0150m000" role="session">Posting Data by Tax Code for Deductions (tfcmg0150m000)</GUIRef>
               </ListItemHead>
               <ListItem>Specify the ledger accounts for the current financial
				company.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/tf/acr/tfacr0110m100" role="session">Accounts by Financial BP Group (tfacr0110m100)</GUIRef>
               </ListItemHead>
               <ListItem>Specify the ledger accounts for the financial business
				partner group.</ListItem>
            </List>
         </ListItem>
         <ListItem>In the <GUIRef href="/baanerp/tf/cmg/tfcmg0146s000" role="session">Posting Data by Bank/Payment Method (tfcmg0146s000)</GUIRef> session, select the step at which LN calculates and
		  posts the tax adjustment.</ListItem>
      </ProcedureList>
      <ExampleSection>
         <SectionTitle>Example</SectionTitle>
         <List>
            <ListIntro>Assume or create a sales invoice with the following details
			 (all amounts are in EUR):</ListIntro>
            <ListItem>Invoice number: ACR20050001</ListItem>
            <ListItem>Amount : 5000</ListItem>
            <ListItem>Tax country/code : NL/001</ListItem>
            <ListItem>Tax amount : 700</ListItem>
            <ListItem>Late payment surcharge : 100</ListItem>
            <ListItem>Discount : 200</ListItem>
            <ListItem>Due date : 10/06/2005</ListItem>
         </List>
         <Paragraph>In this example, the
		  tax amount is calculated on the gross amount of EUR 5,000, which includes the
		  late payment surcharge and the discount.</Paragraph>
         <List>
            <ListIntro>If the invoice is paid before the due date, at the time of
			 receipt you have the following details:</ListIntro>
            <ListItem>Received amount : 4700</ListItem>
            <ListItem>Late payment surcharge : 100</ListItem>
            <ListItem>Discount : 200</ListItem>
         </List>
         <Paragraph>The business partner
		  only paid EUR 4,700, but, at the time of the invoice, you calculated the tax on
		  the total gross amount (EUR 5,000). This implies that you unnecessarily
		  calculated tax on EUR 300 (the sum of all deductions).</Paragraph>
         <Paragraph>With the <GUIRef href="/baanerp/tf/cmg/tfcmg0100s000#tfcmg000.avat" role="manual">Adjust Tax for Deductions</GUIRef> field, you can determine whether you want to adjust the tax
		  on the deductions. If you choose to deduct tax, LN creates a reversal
		  entry for the tax on the deductions amount of EUR 300, that was posted at the
		  time of the invoice creation.</Paragraph>
      </ExampleSection>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000033" role="manual">To use tax codes</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tf/onlinemanual/000127" role="manual">Tax calculation</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>