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Document Entry Scenarios

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Ronaldo edited this page Aug 4, 2020 · 25 revisions

Document Entry Scenarios

Introduction

Several accounting documents exist in Guatemala, and each has a specific and particular manner for which taxes need to be declared and accounted for. In particular, the Sales Tax or VAT (IVA) accounting will have specific scenarios depending on the Tax Category of the Supplier, Customer, and our entity (Company), for export purposes, and even on a per item basis. This wiki page aims to clarify specific example of each scenario to help the user account and declare taxes properly.

Initial configuration

Before we can move to scenarios, it is advisable to configure all the fields that will come in handy for managing our reports properly.

  1. Company: Once you have a production ERPNext server, company will have been created. It is assumed you have already configured default accounts for stock, payable and receivable, etc.
  • 1.1 Address: Company address must at least have the country and Establishment ID Number (a specific number used for electronic invoicing and tax purposes, chosen by company managers). This address is the official fiscal address to be displayed in invoices.
  • 1.2 Tax Withholding Ranges Table: Specify the tax withholding ranges for Income Tax Payable (ISR Por pagar), Income Tax Receivable (ISR Por cobrar), VAT Payable (IVA por Pagar), VAT Receivable (IVA por Cobrar), Income Tax Rate, Sales Tax Rate. Also specify the lower and upper amounts for income tax calculations with the applicable rates in the child table for issue 173
  1. Account: Create a Chargeable account destined to keep track VAT Payable amount
  2. Account: Create a Chargeable account destined to keep track VAT Receivable amount (Credito Fiscal)
  3. Purchase Taxes & Charges Table: Make sure create a Template with the following field values: Title: "IVA 12% Compras Guatemala" Default: 1 Default when excise taxes present: 1 Is Exempt?: False Purchase Taxes and Charges Table: { "Consider Tax or Charge for": On Net Total "Add or Deduct": Add "Type": On Net Total "Is this Tax included in Basic Rate?": 1 "Account Head": ((The VAT Receivable account created above)) "Description": ((Automatic loading or whatever you desire)) "Cost Center": ((Not required, but specify any cost center you wish)) "Rate": 12.00 }
  4. Sales Taxes & Charges Table: Make sure create a Template with the following field values: Title: "IVA 12% Ventas Guatemala" Default: 1 Default when excise taxes present: 1 Is Exempt?: False Sales Taxes and Charges Table: { "Consider Tax or Charge for": On Net Total "Add or Deduct": Add "Type": On Net Total "Is this Tax included in Basic Rate?": 1 "Account Head": ((The VAT Payable account created above)) "Description": ((Automatic loading or whatever you desire)) "Cost Center": ((Not required, but specify any cost center you wish)) "Rate": 12.00 }

Scenario #1: Invoice for Goods Purchased locally

In this scenario, our Company buys a pound of coffee for Q22. The supplier country is the same as invoiced company's country, which means the invoice will be affected for VAT. Value added tax rate is 12% included in price.

Doctype Requirements (Purchase Invoice):

  1. Purchase Taxes & Charges Table: The default template will be selected for you.
  2. Supplier: A properly configured supplier, which must have
  • 2.1 Tax ID & NIT Proveedor: As C/F (Final consumer) or the correct Taxpayer ID Number.
  • 2.2 Address: At the very least, the Country for supplier must be specified, along with other required fields.
  1. Item: An item with at least these fields and corresponding values:
  • 3.1 Name: A proper name for the item being purchased.
  • 3.2 Maintain Stock: 1 (Any physical item must have stock tracking enabled for correct accounting. Does not affect tax calculations in our reports)
  • 3.3 Default UOM: IMPORTANT! Choose a default UOM, and make sure the UOM (in its doctype) has a three digit code configured as per our app requirements. Example: "Unit" = "UNI"
  • 3.4 Is Good: 1 . In the Excise Taxes section, check the "Is Good" select field.
  • 3.5 Other Excise Taxes Fields: This should be read in our specific Excise Tax Configuration Article

Scenario #2: Invoice for Services Purchased locally

In this scenario, our Company buys a month of professional services for Q5,000. The supplier country is the same as invoiced company's country, which means the invoice will be affected for VAT. Value added tax rate is 12% included in price.

Doctype Requirements (Purchase Invoice):

  1. Purchase Taxes & Charges Table: The default template will be selected for you.
  2. Supplier: A properly configured supplier, which must have
  • 2.1 Tax ID & NIT Proveedor: As C/F (Final consumer) or the correct Taxpayer ID Number.
  • 2.2 Address: At the very least, the Country for supplier must be specified, along with other required fields.
  1. Item: An item with at least these fields and corresponding values:
  • 3.1 Name: A proper name for the item being purchased.
  • 3.2 Maintain Stock: 0 (Given that this scenario is a service, no need to track stock. Does not affect tax calculations in our reports).
  • 3.3 Default UOM: IMPORTANT! Choose a default UOM, and make sure the UOM (in its doctype) has a three digit code configured as per our app requirements. Example: "Unit" = "UNI".
  • 3.4 Is Service: 1 . In the Excise Taxes section, check the "Is Service" select field.
  • 3.5 Other Excise Taxes Fields: This should be read in our specific Excise Tax Configuration Article.

Scenario #3: Receipt or Proof of Payment

In this scenario, our Company donates to an entity such as an association, foundation or other non-profit. The donation is for Q5,000. The entity's address is the same as invoiced company's country, which means a purchase invoice will be created, but no VAT will be registered.

Doctype Requirements (Purchase Invoice):

  1. Purchase Taxes & Charges Table: You MUST select the correct template when creating a Receipt or Proof of payment (Comprobante). Purchase Taxes & Charges Table: Make sure create a Template with the following field values: Title: "IVA 12% Compras Guatemala" Default: 0 Default when excise taxes present: 0 Is Exempt?: False Purchase Taxes and Charges Table: { "Consider Tax or Charge for": Total "Add or Deduct": Add "Type": Actual "Is this Tax included in Basic Rate?": 0 "Account Head": ((The VAT Payable account created above)) "Description": ((Automatic loading or whatever you desire)) "Cost Center": ((Not required, but specify any cost center you wish)) "Amount": 0.00 }
  2. Supplier: A properly configured supplier, which must have:
  • 2.1 Tax ID & NIT Proveedor: As C/F (Final consumer) or the correct Taxpayer ID Number.
  • 2.2 Address: At the very least, the Country for Supplier must be specified, along with other required fields.
  1. Item: An item with at least these fields and corresponding values:
  • 3.1 Name: A proper name for the donation item.
  • 3.2 Maintain Stock: 0 (Given that this scenario is a donation, no need to track stock. Does not affect tax calculations in our reports)
  • 3.3 Default UOM: IMPORTANT! Choose a default UOM, and make sure the UOM (in its doctype) has a three digit code configured as per our app requirements. Example: "Unit" = "UNI". Even though it will not appear in the Purchase and Sales Ledger Tax Declaration Report, it is required for proper functionality of our software.
  • 3.4 Is Service: 1 . In the Excise Taxes section, check the "Is Service" select field.
  • 3.5 Other Excise Taxes Fields: This should be read in our specific Excise Tax Configuration Article

Scenario #4: Special Invoice for Services Purchased locally

In this scenario, our Company acquires services from a supplier not registered with the tax authorities. The amount of the service is for 353.68. This calls for our Company to issue a "Special Invoice". A special invoice is issued by us, to register the tax transaction, from a supplier who is unable to provide us with their Sales Invoice because they are not registered with the tax authorities.

As with any purchase invoice, value added tax rate is 12% included in price.

Doctype Requirements (Purchase Invoice):

  1. Purchase Taxes & Charges Table: The default template will be selected for you.
  2. Supplier: A properly configured supplier, which must have
  • 2.1 Tax ID & NIT Proveedor: As C/F (Final consumer), because the Supplier is not registered with tax authorities.
  • 2.2 Address: At the very least, the Country for supplier must be specified, along with other required fields.
  • 2.3 Contact: The supplier must have a national ID indicated in our custom field in contact. This is required by Guatemala's Tax Authority for Special Invoices.
  1. Item: An item with at least these fields and corresponding values:
  • 3.1 Name: A proper name for the item being purchased.
  • 3.2 Maintain Stock: 0 (Given that this scenario is a service, no need to track stock. Does not affect tax calculations in our reports).
  • 3.3 Default UOM: IMPORTANT! Choose a default UOM, and make sure the UOM (in its doctype) has a three digit code configured as per our app requirements. Example: "Unit" = "UNI"
  • 3.4 Is Service: 1 . In the Excise Taxes section, check the "Is Service" select field.
  • 3.5 Other Excise Taxes Fields: This should be read in our specific Excise Tax Configuration Article

Scenario #5: Invoice for Services Rendered locally

In this scenario, our Company sells a month of professional services for Q5,000. The customer country is the same as invoicing company's country, which means the invoice will be affected for VAT. Value added tax rate is 12% included in price.

Doctype Requirements (Sales Invoice):

  1. Sales Taxes & Charges Table: The default template will be selected for you.
  2. Customer: A properly configured customer, which must have
  • 2.1 Tax ID & NIT Cliente: As C/F (Final consumer) or the correct Taxpayer ID Number.
  • 2.2 Address: At the very least, the Country for customer must be specified, along with other required fields.
  1. Item: An item with at least these fields and corresponding values:
  • 3.1 Name: A proper name for the item being purchased.
  • 3.2 Maintain Stock: 0 (Given that this scenario is a service, no need to track stock. Does not affect tax calculations in our reports).
  • 3.3 Default UOM: IMPORTANT! Choose a default UOM, and make sure the UOM (in its doctype) has a three digit code configured as per our app requirements. Example: "Unit" = "UNI".
  • 3.4 Is Service: 1 . In the Excise Taxes section, check the "Is Good" select field.
  • 3.5 Other Excise Taxes Fields: This should be read in our specific Excise Tax Configuration Article

Scenario #6: Invoice for Services Rendered to an International Customer

In this scenario, our Company sells a month of professional services for $10,000. The customer country is different invoicing company's country, which means the invoice will be NOT be affected for VAT. Value added tax rate is 12% included in price.

Doctype Requirements (Sales Invoice):

  1. Sales Taxes & Charges Table: User MUST select the correct Sales Taxes & Charges Template.
  2. Customer: A properly configured customer, which must have: 2.1 Tax ID & NIT Cliente: As C/F (Final consumer) or the correct Taxpayer ID Number. 2.2 Address: At the very least, the Country for customer must be specified, along with other required fields. 2.3 Contact: Since this is an international transaction, our customer's contact information will inevitably be stored, for our purposes we require at least one contact specified as primary and one Valid Identification with D Prefix and ID Number correctly entered. This will be used in the tax declaration. If the field Primary Contact has not been selected, then any contact with at least one row with combination ID Prefix and ID Number will be fetched for the declaration.
  3. Item: An item with at least these fields and corresponding values: 3.1 Name: A proper name for the item being purchased. 3.2 Maintain Stock: 0 (Given that this scenario is a service, no need to track stock. Does not affect tax calculations in our reports) 3.3 Default UOM: IMPORTANT! Choose a default UOM, and make sure the UOM (in its doctype) has a three digit code configured as per our app requirements. Example: "Unit" = "UNI". 3.4 Is Service: 1 . In the Excise Taxes section, check the "Is Services" select field. 3.5 Other Excise Taxes Fields: This should be read in our specific Excise Tax Configuration Article.

Expected appearance in VAT declaration report for scenario 7 will show up as either goods or services An invoice of this kind will show the total amount as services exported. No VAT will be shown.

Scenario #7: Invoice for Items Shipped to an International Customer

In this scenario, our Company sells a box of 12 bags of coffee $60. The customer country is different invoicing company's country, which means the invoice will be NOT be affected for VAT. Value added tax rate is 12% included in price.

Doctype Requirements (Sales Invoice):

  1. Sales Taxes & Charges Table: User MUST select the correct Sales Taxes & Charges Template.
  2. Customer: A properly configured customer, which must have: 2.1 Tax ID & NIT Cliente: As C/F (Final consumer) or the correct Taxpayer ID Number. 2.2 Address: At the very least, the Country for customer must be specified, along with other required fields. 2.3 Contact: Since this is an international transaction, our customer's contact information will inevitably be stored, for our purposes we require at least one contact specified as primary and one Valid Identification with D Prefix and ID Number correctly entered. This will be used in the tax declaration. If the field Primary Contact has not been selected, then any contact with at least one row with combination ID Prefix and ID Number will be fetched for the declaration.
  3. Item: An item for the coffee box with at least these fields and corresponding values: 3.1 Name: A proper name for the item being sold. 3.2 Maintain Stock: 1 (Given that this scenario is an item we track stock. Does not affect tax calculations in our reports). 3.3 Default UOM: IMPORTANT! Choose a default UOM, and make sure the UOM (in its doctype) has a three digit code configured as per our app requirements. Example: "Unit" = "UNI" 3.4 Is Service: 1 . In the Excise Taxes section, check the "Is Services" select field. 3.5 Other Excise Taxes Fields: This should be read in our specific Excise Tax Configuration Article

An invoice of this kind will show the total amount as goods exported in the report. No VAT will be shown.

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