Entering Taxable Journal Entries

1. Generally, you enter journals for taxable amounts as usual, and enter additional taxation information, then calculate taxes before you post the journal. However, there are specific restrictions about when you can enter or modify tax information.
2. After you calculate tax for a journal, the system does not recalculate tax if you revise any line in that journal. If you need to revise a taxable amount or alter its tax information after you have calculated tax, you should either reverse and re–enter the journal (if it is already posted), or delete the unposted journal and re–enter it correctly.
3. After you calculate tax, the resulting new tax journal lines can be edited just like any other journal lines. For example, if you need to change the tax liability account for a specific calculate tax line, you can edit the account after you calculate tax.
   [You cannot reserve funds for a journal until you calculate tax for that journal.]

Calculating tax information during manual journal entry:

1. Navigate to the Enter Journals window.
2. Enter optional batch information. The Status region on the Batch window will display the
   current statuses for Posting, Funds reservation, and journal Approval.
3. Enter your journal information. In the Tax field, enter Required to indicate that you want to enter additional tax information and calculate tax amounts.
4. For each taxable journal line, open the Tax Information descriptive flexfield window and enter a tax type, code, and rounding rule, and specify whether the amount is tax inclusive, or accept the default values specified during system setup. You can also enter other tax information, such as a document identifier or reference information, as appropriate for your accounting policy.
   Depending upon how your tax system is configured, you may also be able to enter a code into the Tax Code field then skip the Tax Information flexfield window.
5. Save the work.
6. Choose Tax Journal to create additional tax lines, and to reduce entered tax inclusive amounts, as appropriate. Or, choose Tax Batch to calculate tax for a journal batch.
7. Save the work.

Tax Information Fields

• Tax Type: Input or Output
• Tax Code: a user–defined Receivables tax code (if the tax type is Output), or a Payables tax name (if the tax type is Input).
• Rounding Rule: Up, Down, or Nearest rounding for tax amounts calculated from this entered amount.
• Amount Includes Tax: enter Yes if this is a tax–inclusive amount.
• Document Identifier, Document Date: (Optional, not validated) You can use these fields for storing a document number such as customer or vendor invoice number and date.
• Customer/Vendor Name, Reference: (Optional, not validated)
• Tax Registration Number: (Optional, not validated) VAT registration number.

Reversing Taxable Journal Entries: You can reverse a journal entry before or after you calculate tax. If you have not already calculated tax for the reversed (original) journal, you can still manipulate the tax information for the reversing journal. For example, you can change the Tax field to Required then enter taxable lines and calculate tax. Or, you can delete all the tax
information and change the journal’s Tax field to Not required.
However, if you reverse a journal for which you have already calculated tax, you cannot remove the tax information from the reversing journal.

Posting Taxable Journal Entries: Tax journals are posted exactly the same as any other journal; posting creates intercompany or suspense balancing entries. You cannot post a taxable journal until you have calculated tax for that journal