Table of Contents 1. Purpose of the document 2

2. Assumptions and Prerequisites 2

3. Tax Setup 3

4. Subledger Accounting Setup 4

5. Accounting of Transactions with the New Rules 11

ERP CLOUD

Self-assessed Tax

Fusion Financials for EMEA

1. Purpose of the document

This document explains accounting aspects of self-assessed tax setup and functionality. Accounts are set

up for each tax rate and tax recovery rate per ledger:

Tax Recoverable Account

Tax Liability Account

Tax Expense Account

Interim Tax Account

By default, these accounts will be used for the accounting of taxable Payables invoice independent of

whether the invoice has standard tax or self assessment. Some countries in Europe have a requirement

stating that different tax recoverable account should be used when the invoice has self-assessed tax.

2. Assumptions and Prerequisites

In this document, the following entities are assumed to have already been set up:

• Data Security

• Enterprise Structure

• Tax Configuration (Tax Regime, Tax codes, statuses and rates)

• Payables System Options

• Supplier Sites

• Procurement Business Function

• Common Options for Payables

3. Tax Setup The system uses the accounts for tax rate and tax recovery rate by default for the accounting of

Payables invoices with recoverable tax. Example setup screens are shown below:

Task name: Manage Tax Rates and Tax Recovery Rates

Navigation : Navigator –> Setup and Maintenance -> Manage Tax Rates and Tax Recovery Rates

4. Subledger Accounting Setup

With Standard Accrual method, when a Payables Invoice with recoverable tax is accounted, the default

subledger accounting rules will use tax rates accounting setup. If tax recoverable account is defined on

tax recovery rate, it will be used, otherwise tax recoverable account on tax rate will be used. This applies

to invoices with both supplier-assessed and self-assessed tax.

The following images show the accounting distributions of two invoices on the same enterprise having

supplier-assessed and self-assessed respectively. You can see that same tax account is used.

Supplier-assessed:

Self-assessed:

In order to make the system use different tax recoverable and tax liability accounts for supplier-assessed

and self-assessed tax, you can setup rules that will use a specific natural account value to create

accounting for self-assessed tax. With this setup, different natural account values will be used to

account for supplier-assessed tax, and self-assessed tax. For supplier-assessed tax the natural account

value will come from tax rate or tax recovery rate, and for self-assessed tax, the natural account value

will come from the value you provided in a new rule created.

In this section you will find the setup details for modifying the Subledger Accounting rules in such a way

that the accounting of self-assessed invoice will use a different account in reference to a standard

supplier-assessed invoice.

Setup steps are as follows:

(1) Create new Account Rules

(2) Create new SLA Journal Entry Rule Set

(3) Create new SLA Accounting Method

(4) Modify Ledger Options

Following images show sample setup steps in detail:

1. Create new Account Rules

We create new account rules that we will use for self assessment.

Task name: Manage Account Rules

Navigation : Navigator –> Setup and Maintenance -> Manage Account Rules

2. Create new SLA Journal Entry Rule Set

We only want to change journal entry rules that apply to the accounting of self assessed

invoices. If you are using a seeded journal entry rule set or if you do want to keep the current

one for future reference, duplicate the rule as shown below. You can also update user created

journal entry rule sets.

Task name: Manage Subledger Journal Entry Rule Sets

Navigation : Navigator –> Setup and Maintenance -> Manage Subledger Journal Entry Rule Sets

Change the Self-Assessed Tax Liability and Self-Assessed Recoverable Tax rules.

3. Create new SLA Accounting Method

We only want to change the journal entry rule assignment that applies to the accounting of self

assessed invoices. If you are using a seeded accounting method or if you do want to keep the

current one for future reference, duplicate the accounting method as shown below. You will

only need to change your related journal entry rule set assignments. You can also update user

created accounting methods.

Perform the changes as shown in the example below:

Task name: Manage Accounting Methods

Navigation : Navigator –> Setup and Maintenance -> Manage Accounting Methods

4. Modify Ledger Options

Change the accounting method to the one you have newly defined.

Task name: Specify Ledger Options

Navigation : Navigator –> Setup and Maintenance -> Specify Ledger Options

5. Accounting of Transactions with the New Rules

There will be separate accounts for self-assessed tax and supplier assessed tax which is important if

these will be declared separately on tax returns.

The following image shows the accounting lines created for an invoice with supplier assessed tax:

The following image shows the accounting lines created for an invoice with self-assessed tax:

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