Some provinces invoice items that are subject to taxes and not subject to tax on the same invoice. If an invoice also has holdback, the holdback invoice needs to calculate taxes based on item tax codes for the original lines of the invoice. It currently calculates taxes on the total of the holdback amount regardless of the original tax exemption status of the lines on the originating invoice.
Invoice
Item QTY AMOUNT HOLDBACK GST PST
widget 1 100.00 10.00 4.50 4.50
widget 1 100.00 10.00 4.50 0.00
Current Holdback Invoice Result
invoice # 1 20.00 1.00 1.00
Correct Holdback Invoice Result
invoice # 1 20.00 1.00 0.50
The Holdback Invoice applies taxes after it brings the holdback amount into the invoice and then applies the default tax rates to the invoice. This can create an incorrect tax amount on the holdback invoice because items the holdback invoice relates to are exempt.
by: Stephan G. | over a year ago | Accounts Payable
Comments
As it stands now, you have to create two holdback invoices; one with GST & PST and the other without PST. This reduces efficiencies in the system as you have to make sure that you separately record taxable amounts and non-taxable amounts. Furthermore, clients wouldn't want to receive two invoices for the same holdback invoice.