Need Procedure to Setup an Offset Tax for AR Transactions with E-Business Tax (Doc ID 1589744.1)

Last updated on MARCH 08, 2017

Applies to:

Oracle E-Business Tax - Version 12.0.6 and later
Information in this document applies to any platform.

Symptoms

Find that offset tax is not calculated on AR.

Receivables > Transaction
Enterred invoice with tax that has offset tax.
But transaction is not calculating or deducting the tax amount.
- Tax rule defined in order to make the Offset tax applicable
- On customer offset tax is enabled.

Requirement of offset tax in Receivables:

Offset tax is a legal requirement in Turkey and you need to use it at AR transactions

On sales invoices there are situations where offset tax is used. The seller reduces the tax and the buyer(vendor) pays the tax for the seller.
In Turkey, all sales invoices for the outsourcing industry are subject to this witHholding tax.
You have withholding tax in sales invoices.

The accounting entries for this invoice is as follows:

Invoice Line amount: 80.856,00
18% Sales Tax: 14.554,08
1/6 withholding: -2.425,68
Total: 92.984,40

Is shown below:

120 Rec 92.984,40
391 Tax 2.425,68 (offset)
391 Tax 16.979,76
600 Rev 80.856,00

Deliveries of goods and services are subject to VAT at rates varying from 1% to 18%.
The general rate applied is 18%.
VAT calculated and collected on sales is considered as 'output VAT.'
For some services provided, from the output tax a certain percentage is offset. This is subject to some services provided described under Income Tax Law.
Scenario: Offset Tax (1/6) - please refer to the example provided beforehand.
- output tax amount 14.554,08
- offset (1/6): 14.554,08/6 = (2,425.68)

Cause

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