Hi All,
I have South African clients. In South Africa VAT (sales tax) is 14%.
So to calculate the vat amount you could use:
vat = gross * 14 / 114
The South African Revenue Service is stating we can no longer use this.
Instead we must use exactly 0.12280 (14 / 114 rounded to 5 decimal places)
So:
vat = gross * 0.12280
Has anyone ever seen something like this before?
--
Paul
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Paul Hill wrote:
> Hi All,
>
> I have South African clients. In South Africa VAT (sales tax) is 14%.
>
> So to calculate the vat amount you could use:
> vat = gross * 14 / 114
>
> The South African Revenue Service is stating we can no longer use this.
> Instead we must use exactly 0.12280 (14 / 114 rounded to 5 decimal places)
>
> So:
> vat = gross * 0.12280
>
> Has anyone ever seen something like this before?
>
>
Well the figure they have given you isn't 14% it is 12.28%. There must
be another factor in the calculation to take it down to that.
I find using decimal fractions much easier, so for example when VAT here
was 17.5% to calculate you did
vat = gross * 0.175 or you could make it harder for yourself:
vat = gross * 17/100
If you have a figure and you just want to add the vat to it:
total = oldtotal * 1.175
Now we just use 1.2 for 20% vat.
So if they say just use 0.1228 then that's nice and easy to use :-)
Peter
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Hi Peter,
If we take 200 and add 14%:
200 Net + 14 % = 228 Gross.
To calculate the vat amount from 228 :
228 * 14 / 114 = 28
14 / 114 = 0.1228070175438596
It's not normally how I would calculate VAT but it's correct.
Normally I use:
net = ROUND(gross / (1 + (VatRate / 100)), 2)
Paul
On 11 June 2014 11:07, Peter Cushing <pcushing@whisperingsmith.com> wrote:
> Paul Hill wrote:
>>
>> Hi All,
>>
>> I have South African clients. In South Africa VAT (sales tax) is 14%.
>>
>> So to calculate the vat amount you could use:
>> vat = gross * 14 / 114
>>
>> The South African Revenue Service is stating we can no longer use this.
>> Instead we must use exactly 0.12280 (14 / 114 rounded to 5 decimal places)
>>
>> So:
>> vat = gross * 0.12280
>>
>> Has anyone ever seen something like this before?
>>
>>
>
> Well the figure they have given you isn't 14% it is 12.28%. There must be
> another factor in the calculation to take it down to that.
> I find using decimal fractions much easier, so for example when VAT here was
> 17.5% to calculate you did
> vat = gross * 0.175 or you could make it harder for yourself:
> vat = gross * 17/100
> If you have a figure and you just want to add the vat to it:
> total = oldtotal * 1.175
> Now we just use 1.2 for 20% vat.
>
> So if they say just use 0.1228 then that's nice and easy to use :-)
>
> Peter
>
>
>
[excessive quoting removed by server]
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Paul Hill wrote:
> Hi Peter,
>
> If we take 200 and add 14%:
> 200 Net + 14 % = 228 Gross.
>
> To calculate the vat amount from 228 :
> 228 * 14 / 114 = 28
>
> 14 / 114 = 0.1228070175438596
>
> It's not normally how I would calculate VAT but it's correct.
>
> Normally I use:
> net = ROUND(gross / (1 + (VatRate / 100)), 2)
>
> Paul
>
>
Sorry "gross" didn't register with me as I've never had to calculate the
vat from that figure.
So 28 is 14% of 200 but only 12.28% of 228
In SOP calculations you have to start off the net figure, then apply any
discounts including potential settlement discounts then apply the VAT %
to that. The net figure, discounts and the VAT amount are stored in the
SOP data so can use them separately.
Peter
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At 03:07 2014-06-11, Peter Cushing <pcushing@whisperingsmith.com> wrote:
[snip]
>Well the figure they have given you isn't 14% it is 12.28%. There
>must be another factor in the calculation to take it down to that.
No. It is that the percentages have different bases. 14% is
based on the pretax amount. ~12.28% is based on the posttax amount.
A simple-number example might help. Take 100 and add 25% to
it. You get 125. Take 125 and subtract 25% from it. You get 93.75,
not 100. (The inverse to adding 25% is subtracting *20%*.)
[snip]
Sincerely,
Gene Wirchenko
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FWIW in Argentina VAT is 21%
We simply calculate VAT as: net * 0.21 = VAT
Gross = net + VAT
or Gross = net * 1.21
It gets a little bit more complicated because there are different
categories of VAT tax payers:
companies selling to other companies must show VAT separate from total
in invoices, so an invoice would look like:
net 100
VAT 21
Total 121
this is because the purchasing company has to take the VAT off its dues
to the Tax Department
VAT in all sales, ie 300,000
VAT in all purchases ie 250,000
Net VAT due to tax dept would be 50,000
whereas an over the counter sale to an individual consumer would only
show the total thus:
Total 121
In this case, all over the counter sales have to be marked down by the
21% VAT to obtain the net amount, then apply the VAT rate and obtain the
VAT charged to customers.
Business rules have to account for all that in our VFP programs
Rafael Copquin
El 11/06/2014 7:07, Peter Cushing escribió:
> Paul Hill wrote:
>> Hi All,
>>
>> I have South African clients. In South Africa VAT (sales tax) is 14%.
>>
>> So to calculate the vat amount you could use:
>> vat = gross * 14 / 114
>>
>> The South African Revenue Service is stating we can no longer use this.
>> Instead we must use exactly 0.12280 (14 / 114 rounded to 5 decimal
>> places)
>>
>> So:
>> vat = gross * 0.12280
>>
>> Has anyone ever seen something like this before?
>>
> Well the figure they have given you isn't 14% it is 12.28%. There
> must be another factor in the calculation to take it down to that.
> I find using decimal fractions much easier, so for example when VAT
> here was 17.5% to calculate you did
> vat = gross * 0.175 or you could make it harder for yourself:
> vat = gross * 17/100
> If you have a figure and you just want to add the vat to it:
> total = oldtotal * 1.175
> Now we just use 1.2 for 20% vat.
>
> So if they say just use 0.1228 then that's nice and easy to use :-)
>
> Peter
>
>
>
[excessive quoting removed by server]
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On 12 June 2014 13:57, Rafael Copquin <rcopquin@fibertel.com.ar> wrote:
> FWIW in Argentina VAT is 21%
>
> We simply calculate VAT as: net * 0.21 = VAT
> Gross = net + VAT
> or Gross = net * 1.21
Yes, exactly what I do.
So to remove VAT from Gross you can do:
e.g.
55 * 1.21 = 66.55
66.55 - 55 = 11.55
or:
66.55 * 21 / 121 = 11.55
I have no problem with either method, but I am being instructed by the
tax authorities to use a fixed value instead of "21 / 121".
This causes rounding errors.
> It gets a little bit more complicated because there are different categories
> of VAT tax payers:
It's not uncommon.
--
Paul
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----- Original Message -----
From: "Rafael Copquin" <rcopquin@fibertel.com.ar>
To: <profox@leafe.com>
Sent: Thursday, June 12, 2014 2:57 PM
Subject: Re: VAT Rates
> FWIW in Argentina VAT is 21%
> We simply calculate VAT as: net * 0.21 = VAT
> Gross = net + VAT
>'OR" Gross = net * 1.21
No, your OR clause is false, because of roundings.
When you calculate a bill, you must think
as a fiscalist and not like a mathematician.
You have a net value, 2 decimals provided, then
you calculate the taxes round(rate*net,2),
and then you add the net and the taxes to get the gross.
And the result can be different from round(net*(1+rate),2).
The true gross is always an addition (net+taxes), and
never a multiplication basis, this avoiding rounding deltas.
> It gets a little bit more complicated because there are different categories of VAT tax payers:
Then you sum the amount grouped by each tax rate, apply it,
and then sum the net and the previous different calculated taxes.
Tha't the only true way, whatever the country.
Gérard.
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On 12 Jun 2014 16:59, "Gérard Lochon" <g-lochon@wanadoo.fr> wrote
> Tha't the only true way, whatever the country.
Except, it seems South Africa. Which is the reason I created this thread!
>
>
> Gérard.
>
>
>
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Oui monsieur, you are right. When we send the monthly tax return to the
tax department, we always indicate the true net and the VAT, and the
gross is the sum of both amounts. Otherwise, rounding screws us.
BTW, we have electronic invoicing here, which consists of a Web Service
that we have to use to send the invoice and VAT information to the Tax
Dept. They receive it, and return the invoice number, and a very long
number which is called C.A.E. (Spanish for electronic authorization code)
If we do not receive the CAE and the invoice number back from the
WebService for whatever reason, we cannot issue the invoice. The invoice
is only legal if it contains those numbers. The WS replies in seconds,
so it is not a problem.
One of the main reasons for the WS to reject the data sent to it is the
f....g rounding you mention, that is why we send the actual net and tax,
plus the rate applied (there are some goods that are taxed at 21% and
some others that are taxed at 10.5% and even at 0%) It is very
complicated, but it works and we get good fees for maintaining those
routines :-)
Rafael Copquin
El 12/06/2014 12:59, Gérard Lochon escribió:
> ----- Original Message ----- From: "Rafael Copquin"
> <rcopquin@fibertel.com.ar>
> To: <profox@leafe.com>
> Sent: Thursday, June 12, 2014 2:57 PM
> Subject: Re: VAT Rates
>
>
>> FWIW in Argentina VAT is 21%
>
>> We simply calculate VAT as: net * 0.21 = VAT
>> Gross = net + VAT
>> 'OR" Gross = net * 1.21
>
> No, your OR clause is false, because of roundings.
>
> When you calculate a bill, you must think
> as a fiscalist and not like a mathematician.
>
> You have a net value, 2 decimals provided, then
> you calculate the taxes round(rate*net,2),
> and then you add the net and the taxes to get the gross.
>
> And the result can be different from round(net*(1+rate),2).
>
> The true gross is always an addition (net+taxes), and
> never a multiplication basis, this avoiding rounding deltas.
>
>> It gets a little bit more complicated because there are different
>> categories of VAT tax payers:
>
> Then you sum the amount grouped by each tax rate, apply it,
> and then sum the net and the previous different calculated taxes.
>
> Tha't the only true way, whatever the country.
>
>
> Gérard.
>
>
[excessive quoting removed by server]
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