Tax accrual at goods receipt

A recoverable tax is a tax that allows full or partial recovery of taxes paid on purchases, either as a recoverable payment or as an offset against taxes owed. For example, most VAT-type taxes allow for full recovery of taxes paid on goods and services that relate to taxable business supplies. In cases where an organization purchases both taxable and exempt supplies, the tax authority can designate a partial recovery rate to reflect the combination of taxable and exempt statuses. Non-Recoverable Tax that record tax amounts on earned and unearned discounts and adjustments that you cannot claim as a deduction against tax liability.

Non recoverable Tax nothing but we don't recover anything from Paid Tax Amount, Ex: Sales Tax and VAT on Expense and Fixed Assets (In case of End Consumers) Recoverable Tax nothing but we recover Some or Full of the Tax amount which we paid already. Ex: VAT on Inventory Items, Some Geography or Product Exemptions or Rebates Most of the Cases the Company's have Sales tax and VAT, For Sales Tax, The company doesn't recover any amount and Treats all amount as Expense...so for this Tax Rates define is enough and no need to setup Recoverable Tax Rates. Ex: IF Sales Tax is 3%, we need to set up as follows. Tax rate -> 3%....No need to define Recovery rates. For VAT, The company Recovers Full (100%) amount for Inventory Items (Make the product and sell to Customers); and Don't Recover(0%) any amount for Expense items and Fixed Asset Purchases because the company is End Consumer for this,......so for this we need to Define Tax Rate and Recoverable Rates ( 0% and 100% separately).....we need to assign, for which Transactions or Accounts we are Recovering and not Recovering the amounts in Tax rules through Determining factors. Ex: IF VAT IS 4%, we need to set up as follows. Tax rate -> 4% Recoverable Rate ->100% Recoverable Rate ->0% Based on our requirement we can define Various Tax Recovery rates Like 2%,5%,10%,.... (not only 0% and 100%).

Tax accrual at goods receipt

•	When goods are received, entries are created for received item cost (1) and tax (2).

•	When an invoice is received, entries are created for invoice value, including tax (3).

•	When an invoice is matched, entries are created for item cost (4), variance (5), tax on item cost (6), and tax on variance (7).

Tax accrual at supplier invoice

•	When goods are received, entries are created for received item cost (1) but not tax.

•	When an invoice is received, entries are created for invoice value, including tax (2).

•	When an invoice is matched, entries are created for item cost (3), variance (4), tax on item cost (5), and tax on variance (6).