<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tf/onlinemanual/000407" xml:lang="en">
   <Header>
      <Title>Trade notes division</Title>
      <Keyword type="header" order="d1e1975479">
         <Level1>Trade notes</Level1>
         <Level2>division</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>The total payable amount can be divided into multiple trade
		notes of smaller denominations. Instead of issuing one trade note for the
		entire amount, companies issue multiple trade notes that together cover the
		amount.</Paragraph>
      <List>
         <ListIntro>Trade notes can be divided for two reasons:</ListIntro>
         <ListItem>To create trade notes of smaller amounts that can be <Link href="/baanerp/tf/glossary/glossary#000441" role="glossary">endorsed</Link> or <Link href="/baanerp/tf/glossary/glossary#000439" role="glossary">discounted</Link>. The denomination
		  of such trade notes depends on the agreement between the company and the
		  business partner.</ListItem>
         <ListItem>To minimize the amount of <Link href="/baanerp/tc/glossary/glossary#000400" role="glossary">stamp tax</Link> to be paid. Instead of issuing one trade note for the entire amount,
		  multiple trade notes are issued that together cover the amount.</ListItem>
      </List>
      <List>
         <ListIntro>For each business partner, you can indicate the trade notes
		  division data in the <GUIRef href="/baanerp/tc/com/tccom4114s000" role="session">Pay-by Business Partner (tccom4114s000)</GUIRef> session, for the following:</ListIntro>
         <ListItemHead>Predetermined values supplied by the business
		  partner</ListItemHead>
         <ListItem>To divide the trade notes amount, select the <GUIRef href="/baanerp/tc/domains/tndm#predetermined" role="option">Predetermined Values</GUIRef> option, in the <GUIRef href="/baanerp/tc/com/tccom4114s000#tccom114.tndm" role="manual">Trade Note Division Method</GUIRef> field.</ListItem>
         <ListItemHead>Stamp tax tariffs</ListItemHead>
         <ListItem>If you must pay <Link href="/baanerp/tc/glossary/glossary#000400" role="glossary">stamp tax</Link> on trade notes, you can set up stamp tax as described in <Link href="/baanerp/tc/onlinemanual/000400" role="manual">To set up stamp tax</Link>.</ListItem>
      </List>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Division data on predetermined values</SectionTitle>
      <Paragraph>Some suppliers instruct your company's accountant about the
		maximum number of trade notes that they wish to receive for one transaction, as
		well as the denominations of the trade notes.</Paragraph>
      <Paragraph>For example, the supplier does not wish to receive more than
		four trade notes to cover one invoice. If the invoice amount is up to 100,000
		EUR, the amount can be split into trade notes of 25,000 EUR. Invoice amounts of
		up to 1,000,000 EUR can be split into trade notes of 100,000 EUR. And so on.</Paragraph>
      <Paragraph>The following table shows the data of this agreement. All the
		values are in the local currency.</Paragraph>
      <TABLE border="1" borderstyle="default" space-and-orientation="indented-estimated">
         <THEAD noTR="1">
            <TR no="1" isLast="true">
               <TD rowspan="1" colspan="1">Up to Amount</TD>
               <TD width="224" rowspan="1" colspan="1">Trade
				Note Denomination</TD>
               <TD width="114" rowspan="1" colspan="1">Maximum
				number</TD>
            </TR>
         </THEAD>
         <TBODY noTR="3">
            <TR no="1" isLast="false">
               <TD rowspan="1" colspan="1">100,000</TD>
               <TD width="224" rowspan="1" colspan="1">25,000</TD>
               <TD width="114" rowspan="1" colspan="1">4</TD>
            </TR>
            <TR no="2" isLast="false">
               <TD rowspan="1" colspan="1">1,000,000</TD>
               <TD width="224" rowspan="1" colspan="1">100,000</TD>
               <TD width="114" rowspan="1" colspan="1">4</TD>
            </TR>
            <TR no="3" isLast="true">
               <TD rowspan="1" colspan="1">10,000,000</TD>
               <TD width="224" rowspan="1" colspan="1">1,000,000</TD>
               <TD width="114" rowspan="1" colspan="1">4</TD>
            </TR>
         </TBODY>
      </TABLE>
      <List>
         <ListIntro>Based on this data, an invoice of 85,000 EUR will result
		  in:</ListIntro>
         <ListItem>Three generated trade notes of 25,000 EUR each.</ListItem>
         <ListItem>One trade note for the remaining amount, which is 10,000
		  EUR.</ListItem>
      </List>
      <List>
         <ListIntro>If the maximum number of trade notes is three, an invoice of
		  85,000 EUR will result in:</ListIntro>
         <ListItem>Two generated trade notes of 25,000 EUR each.</ListItem>
         <ListItem>One trade note for the remaining amount, which is 30,000
		  EUR.</ListItem>
      </List>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Division data by stamp tax tariff</SectionTitle>
      <Paragraph>If the business partner does not supply predetermined values for
		the trade note division, you can set up the optimal trade note division to
		minimize the amount of <Link href="/baanerp/tc/glossary/glossary#000400" role="glossary">stamp tax</Link> to be paid.</Paragraph>
      <Paragraph>In some countries, the stamp tax on a trade note is determined
		based on a graduated calculation table, for example:</Paragraph>
      <TABLE border="1" borderstyle="default" space-and-orientation="indented-estimated">
         <THEAD noTR="1">
            <TR no="1" isLast="true">
               <TD rowspan="1" colspan="1">Up to Trade Note Amount</TD>
               <TD rowspan="1" colspan="1">Stamp Tax
				Amount</TD>
            </TR>
         </THEAD>
         <TBODY noTR="3">
            <TR no="1" isLast="false">
               <TD rowspan="1" colspan="1">10,000 EUR</TD>
               <TD rowspan="1" colspan="1">2
				EUR</TD>
            </TR>
            <TR no="2" isLast="false">
               <TD rowspan="1" colspan="1">100,000 EUR</TD>
               <TD rowspan="1" colspan="1">20 EUR</TD>
            </TR>
            <TR no="3" isLast="true">
               <TD rowspan="1" colspan="1">1,000,000
				EUR</TD>
               <TD rowspan="1" colspan="1">200 EUR</TD>
            </TR>
         </TBODY>
      </TABLE>
      <Paragraph>Stamp tax amounts are expressed in the local
		currency.</Paragraph>
      <Note>
         <SectionTitle>Note</SectionTitle>
         <Paragraph>Stamp tax is usually either gradually decreasing or linear.
		  In other words, as the trade note amount increases, the tax percentage is
		  either fixed or decreasing. As a consequence, when trade notes are split, trade
		  notes must always be generated for the highest possible trade note amount.</Paragraph>
      </Note>
      <Paragraph>To save on the stamp tax to be paid, you can calculate the
		optimal structure of the number of trade notes and their
		denominations.</Paragraph>
      <List>
         <ListIntro>For example, if the amount to be paid is 40,000 EUR, you can
		  do one of the following:</ListIntro>
         <ListItem>Issue one trade note of 40,000 EUR and pay 20 EUR stamp
		  tax.</ListItem>
         <ListItem>Issue 5 trade notes of 8,000 EUR and pay 5 *2 = 10 EUR stamp
		  tax.</ListItem>
      </List>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tf/onlinemanual/000405" role="manual">Trade notes – overview</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tf/onlinemanual/000406" role="manual">To set up and process trade notes payable</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>