Sales tax and Income tax on sales and purchase invoice

ERPNext Accounting
,
1

Greetings, hope you are doing well.

We require assistance for manipulating tax calculation as below, we are using ERPNext: v10.1.73

Currently we are discussing Sales Tax for Service Items.

We have two taxes applied on each sales invoice

1

  1. Sales Tax ----- A = Invoice Amount x 13%
    Sales Tax = 13 percent of invoice amount

  2. Income Tax ---- B = (Invoice Amount + 13% of Invoice Amount) x 10%
    Income Tax = 10 Percent of (Invoice Amount + Sales Tax)

Case 1
20% of A is withheld by our customer, and submitted to Government dept SRB.
80% of A has to be submitted by our company to the Government dept SRB.
Income tax is withheld by our customer and submitted to Government Dept FBR.

Case 2
100% of A has to be submitted by our company to the Government dept SRB.
Income tax is withheld by our customer and submitted to Government Dept FBR.

Similarly we have to make deductions for our supplier as below:
100% of A has to be submitted by our supplier to the Government dept SRB.
Income tax is withheld by us customer and submitted to Government Dept FBR.

Dear @nabinhait, @umair, @rmehta please guide how to implement in ERP NEXT, Thanks.

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2

Hello,

Here is how you should setup Sales Taxes and Charges master for the auto-application of Sales Tax and Income tax on the invoices.

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For the auto-deduction on taxes withheld by the Customer, you can use Tax Withhold feature of ERPNext, available in V11.

https://erpnext.org/docs/user/manual/en/accounts/tax-withholding

Since this is a community support forum, please avoid tagging individuals on the post. For the priority support, you can reach us personally to learn about enterprise support plan.

3

Dear @umair, much thanks for your support, actually we were stucked since 2 days, and had to inform our management if this feature is availaible in ERP Next, otherwise management had planned to demo and might switch to other ERPs.

Please be informed, Income tax is included in Basic Rate, that is if total amount of items + sales tax is 100 USD, then 10% income is deducted from 100%. So please inform if this calculation can also be be performed in ERP Next v 11 ?
We seek your help towards, have uploaded excel file with calculations here

4

Whether your managers opt for priority support or not, best to test and confirm your particular case Shujaat_Kargathra?

To report your results would benefit all concerned for this pending v11 release?

Test this too Sales tax and Income tax on Sales Invoice - custom calculations - #2 by clarkej