Prices Including Tax

IFS Cloud is built to handle B2B collaborations. In most countries taxes are levied on the price charged to the end consumer. This means that prices before tax are used in trade between companies. However, some countries do not follow this concept but trade B2B with prices including tax.

IFS Cloud supports both price and price including tax. The Use Price Incl Tax setting specifies the basis of the tax calculation and is available in the company, site, customer, supplier, sales part etc. This setting provides the possibility to enter either the price or the price including tax. Based on the setting on Use Price Incl Tax, you can enter a value on either the Price field or the Price Including Tax field. Both the price and the price including tax are saved in the database.

The setting of Use Price Incl Tax in the company is defaulted to the site, supplier and customer. The setting in the supplier and customer is defaulted to the purchase order, supplier agreement, customer order, sales quotation, customer agreement, return material authorization and shipment. The setting in the site is defaulted to the sales part, non-inventory sales part, package part, sales charge types, supplier for purchase part and purchase charge types.

If the Use Price Incl Tax option is enabled: Only the Price Including Tax field is editable and the price is non editable. The basis for tax calculation is the price including tax. The price is calculated based on the entered price including tax value and the tax code.

If the Use Price Incl Tax option is disabled: Only the Price field is editable and the price including tax is non editable. The basis for tax calculation is the price. The price including tax is calculated based on the entered price and the tax code.

General “Price Including Tax” formula

The general formula for the Price Including Tax is Price * ((sum tax % / 100) +1). This will affect the customer order and sales quotation lines when you know the customer.

Example:

Currency: SEK
Tax % : 25% and 5%
Price excl. Tax : 100 SEK
Price incl. Tax : 130 SEK = 100 * (( 25 / 100+5 / 100) +1)

General “Price” formula

The general formula for the Price is Price Including Tax - Tax. This will affect the customer order and sales quotation lines when you know the customer.

Example:

Currency: SEK
Tax: 25% and 5%
Price Including Tax : 260 SEK
First calculate the Tax
Total Tax Amount (un-rounded) = Price Incl Tax / (1+Total Tax%) * (Total Tax%)
Total Tax Amount (un-rounded) = 260 / ((1+(25/100+5/100)) * (25/100 + 5/100) = 60 SEK

Tax amount for 25% (rounded) = 60 / 30*25 = 50 SEK
Tax amount for 5% (rounded) = 60 / 30*5 = 10SEK

Total Tax Amount (rounded) = 50+10 = 60 SEK

Price = Price Incl Tax - Tax = 260 -60
Price = 260 SEK

Dependencies - General

Company/Address/Tax Information
Company/Tax Control

Dependencies - Customer Order

Sales Part

On the sales part the parameter ”Taxable” is defined. If it is set to true, taxes will be calculated for the part.
Tax code: If object level tax validation is required and part is table a tax code must be defined. This will indicate the tax percentage that shall be applied to the sales part.
If a Tax class is specified for the part, the price including tax cannot be calculated. Instead the value from the Price field will be displayed also in the Price Incl Tax field.

Price Lists

On a price list, you can connect sales parts which belong to different sites, and those sites do not need to be connected to the same company. Therefore, on a price list you could find sales parts that belong to companies with different tax codes. This means that a mixture of sales parts can be included in a price list.

Customer

On the customer you decide whether taxes shall be applied or not. This is done by defining the tax liability on the customer’s address.
When address level tax will be apply on the customer order or sales quotation, the tax codes are also defined per customer address.

Customer Order Line

When the customer's tax liability is Tax, taxes are calculated if the sales part is taxable. Tax liability is fetched as a default value from the Customer Order header. It can be manually changed.

Dependencies - Procurement

Site

When address level taxes apply, you define applicable tax codes for a ship-to scenario on site's address.

Supplier

On the supplier’s invoice page, the tax liability is defined. Observe that if the IFS/Invoice module is not installed, a Tax Liability on the supplier’s purchasing data will be used instead.
On the Supplier/Address/Delivery Tax Information tab: tax codes are defined for the ship-from scenario in address level tax handling.

Purchase Part

The part taxability is defined. A purchase part can be taxable or not. If not taxable, no taxes will be calculated.

Supplier for Purchase Part

If object level tax validation is required and purchase part is taxable it is mandatory to enter tax code on supplier for purchase part, since tax codes can differ between products there is a tax code on the supplier for purchase part.

Purchase Order Line

When the supplier tax liability is taxable and the part is taxable, taxes are calculated. Tax liability is fetched as a default value from the purchase order header. It can be manually selected or cleared.

Supplier Agreement/Part Step Pricing

Supplier agreements are connected to an Owning Site, but they can be a group agreement, meaning that they shall apply to many different sites. There is no limitation on whether those sites belong to the same company or not.
The price including tax functionality will only work when the price is valid for just one site.